5.1 Economic Development Flashcards
Define economic development
Increase in economic welfare through growth in the productive scale and wealth of an economy
What are the 4 types of economies
Developed
Developing
Under developed
Newly industrialised economies
What are the different characterisitcs to compare econmies
Industrial structure
Educational attainment
Healthcare
Factor Productivity
Saving and investment
Population growth
Incomes
Characteristics of a developed economy
high GDP per capita
high life expectancy
high literacy rate
a stable or dwindling population growth
excellent infrastructure
high levels of foreign investments
excellent healthcare
high productivity - more capital intensive
a relatively large tertiary sector.
Charactersitics of a developing econmy
expansion of the industrial sector
fewer people suffering the extremes of poverty
They may attract high levels of foreign investments
will be undergoing major economic shifts towards the tertiary sector.
may still have a low standard of living
high population growth.
Characteristics of under-developed economies
very low GDP per capita
high population growth
poor infrastructure
healthcare and education
low literacy rates
low levels of foreign investments poor productivity
relatively large primary sector
The reasons for low economic development
Dependence on primary sector
Low levels of savings
Low factor productivity
Poor investment in infrastructure
High population growth
Wars and conflicts deplete resources and Corrupt and/or unstable governments
Why do countries get trapped in low economic development
Low economic development –> Low education –> low productivity–> low incomes –> lack of capital –> low investment –> low economic growth
Explain how dependence on primary sector leads to low economic development
farming and agricultureis the most common work in less-developed economies. Most people work to feed themselves and their families and sell off any surplus. This means that there is little or no trade happening , which results in poor incomes, no economic growth or development.
Explain how low levels of savings leads to low economic development
because of low incomes and widespread poverty.
Explain how low factor productivity leads to low economic development
Poor education and lack of training.
Insufficient investment in modern capital
High avg costs - high prices
Explain how Poor investment in infrastructure leads to low economic development
good infrastructure in transport, health and education is essential for growth and development.
Explain how High population growth leads to low economic development
reduce the real GDP/income per head.
Explain how the other factors (war and corruption) lead to low economic development
causes neglect of economy and citizens’ welfare
What are the development indicators
GDP per capita
population living on less than $1 a day
life expectancy at birth
adult literacy rate
access to safe water supplies and sanitation
proportion of workers in different sectors of production
