Ch 22 Flashcards
What is disposable income?
Disposable income is the amount of money a household has available to spend and save after paying taxes (income tax).
What is economic growth?
Economic growth is an increase in a country’s productive capacity and GDP.
What does employment refer to?
Employment refers to people in paid work.
What is the Human Development Index (HDI)?
The Human Development Index (HDI) is a collection of statistics that are combined into an index, ranking countries according to their human development.
What does income elastic mean?
Income elastic means the percentage change in demand for a product is proportionately greater than the percentage change in income.
What does per capita mean?
Per capita means for each person, in relation to people taken individually.
What are POPs?
POPs are the rates of currency conversion that affect the gain of tourism.
What is meant by ‘fertilizing’ in economics?
Fertilizing refers to the production of services in the economy.
What is unemployment?
Unemployment is the condition of people who are not in work but are actively seeking a job.
What are the three main groups of economies?
- Developed economies
- Developing economies
- Emerging economies
These classifications help understand the different stages of economic development.
What characterizes developed economies?
High income levels, highly industrialized, high literacy rate, high life expectancy, low levels of unemployment, good infrastructure
Developed economies typically provide better access to healthcare, education, and housing.
Fill in the blank: Developed economies have a high _______ rate.
literacy
What is a key feature of developing economies?
Low income levels, high unemployment, low life expectancy, poor infrastructure, high population growth
Developing economies often struggle to meet basic needs for their populations.
Fill in the blank: Developing economies are characterized by high _______ growth.
population
What defines emerging economies?
Rapid economic growth, increasing average income, expanding middle class
Emerging economies are seen as risky but offer potential for high returns as they grow.
True or False: Emerging markets may create trade opportunities and change employment patterns.
True
What happens to consumer behavior in emerging markets as income increases?
Consumers buy more goods and services, leading to increased domestic growth
This growth makes emerging economies attractive to new businesses.
Fill in the blank: As economies grow, disposable income also _______.
rises
What is likely to happen to demand as income becomes elastic?
Demand increases with rising income
This can lead to more spending on various goods and services.
What infrastructure issues do developing economies face?
Lack of roads, schools, and factories
Poor infrastructure hinders economic growth and access to services.
Fill in the blank: Developed economies typically have a _______ standard of living.
good
What are the implications of economic growth for individuals and businesses in emerging markets?
Increased demand, higher spending, trade opportunities
Businesses may benefit from the growing consumer base.
What is one of the most important indicators of health of an economy?
Employment patterns
