Chapter 10

Question 1

Development

Answer 1

the process of improving the material conditions of people through diffusion of knowledge and technology.

Question 2

(MDC),

Answer 2

A developed country, also known as a more developed country (MDC), has progressed further along the development continuum

Identified as a very high developed country by the UN

Question 3

LDC

Answer 3

A developing country, also frequently called a less developed country (LDC), has made some progress toward development, though less than the developed countries

Question 4

Human Development Index

Answer 4

UN created the Human Development Index (HDI) as one measure of development

The highest HDI possible is 1.0

The HDI considers development to be a function of three factors: a decent standard of living, a long and healthy life, and access to knowledge

Computed every year since 1980

Question 5

Development regions: rough approximation of the regional scores and the exceptions

Answer 5

Geographers divide the world into two developed and seven developing regions

Japan and South Korea are identified separately

UN classifies Russia as developed

Question 6

Gross national income (G N I)

Answer 6

is the value of the output of goods and services produced in a country/year including money that enter and leaves the country

Question 7

Purchasing power parity (P P P)

Answer 7

is an adjustment made to the GNI to account for differences among countries in the cost of goods

-Ex – resident of country A has same income as country B but they have to pay more for Starbucks resident of country B is better off

Question 8

Gross domestic product (G D P)

Answer 8

also measures the value of the output of goods and services produced in a country/year, but it does not account for money that leaves and enters the country

Question 9

i

Answer 9

Dividing GNI by total population estimates the contribution made by an average individual contributing to a countries wealth

The higher the per capita GNI the greater the potential for ensuring all people have a comfortable life

Per capita GNI measures average wealth not distribution of wealth

Average per capita income is higher in more developed countries because people earn living in different ways

Question 10

Primary sector

Answer 10

Directly extracting materials from Earth through agriculture or through mining, fishing, and forestry- share of GNI is relatively high in developing countries, low share in developed countries indicate a handful of farmers produce enough food for the rest of society

Question 11

Secondary sector

Answer 11

Manufacturing raw materials into products- share of GNI has decreased in developed countries

Question 12

Tertiary sector

Answer 12

Providing goods and services to people in exchange for payment- share of GI is large and increasing in both countries

Retail banking government law education

Question 13

Productivity

Answer 13

is the value of a particular product compared to the amount of labor needed to make it

Productivity can be measured by the value added per capita

The value added in manufacturing is the gross value of a product minus the costs of raw materials and energy

In developed countries, workers produce more with less effort because they have access to more machines, tools and equipment

More developed countries workers are more productive

Wealth in developed countries is used to purchase goods and accessible to almost everyone

Question 14

Health

Answer 14

From the many health and medical indicators, the UN has selected life expectancy at birth as the contributor to the HDI

Baby born now is expected to live on average to 71 worldwide

more developed- 80

Less developed- 57

Question 15

Education; years of schooling for today’s adults vs expected years of schooling for today’s youth

Answer 15

The U N considers years of schooling to be the most critical measure of the ability of an individual to gain access to knowledge needed for development

Years of schooling for today’s adults (average school years for adults >25)

• More developed- 12 years
• Less developed-5 years

Expected Years of schooling for youth (time a 5 year old will spend in school)

• Half of 5 years old will graduate college
• 9 / 10 years in sub saharan africa

Question 16

Pupil/teacher ratio

Answer 16

The fewer pupils a teacher has, the more likely that each student will receive effective instruction

More developed- less students per teacher
Education might receive higher % of GNI in developing countries but those countries GNI tends to be lower to begin with so they spend much less/ student

Question 17

Literacy rate

Answer 17

The literacy rate is the percentage of a country’s people who can read and write

Question 18

inequality-adjusted H D I (I H D I)

Answer 18

The IHDI modifies the HDI to account for inequality within a country

under perfect equality, the HDI and the IHDI are the same.

If the IHDI is lower than the HDI, the country has some inequality

the greater the difference in the two measures, the greater the inequality

Developed countries have a lower gap according to global standards

Sub Saharan Africa and eastern Asia have lowest

Question 19

Widening Inequality within Developed Countries

Answer 19

Since the 1980s, inequality has increased in most developed countries, including the United States, United Kingdom, and Canada

Question 20

Gini coefficient

Answer 20

calculates the extent to which the distribution deviates from exactly equal

A Gini coefficient of 0 represents exact equality- every person has same income

A Gini coefficient of 1 is total inequality

Question 21

Canada score compared to peer countries

Answer 21

Canada is 12th place- C grade

Income inequality has increased in 20 years

In 1980 it was 0.3

The richest 1% of Canadians took 1/3

Question 22

Brazil & Turkey example of inequality

Answer 22

The extent of inequality within these countries can be seen in two ways:

1. The difference between the H D I and I H D I- 2 countries have similar HDI scores but Brazil has higher inequality that Turkey

2, Inequality can also be seen through differences in G D P per capita among states or provinces within the countries- the GDP per capita is 20 000 in rich areas and only 4000 In poor areas

They fall middle according to HDI, brazil 79 turkey is 71
Brazil’s wealthiest regions are in southeast coast- san paulo and rio de janerio

Question 23

Gender-related Development Index (G D I)

Answer 23

The U.N. combines Human Development Index data on income, education, and life expectancy in a measure of the gender gap
If females and males had the same levels of income, education, and life expectancy, the GDI would be 1.000

GdI is 0.920

Level of achievement is 8% lower

In developing its 10% lower

Question 24

Gender Inequality Index

Answer 24

The UN combines data on reproductive health, empowerment, and the labor market in a measure of the gender gap

A score of 0 would mean that men and women fare equally
The GII is higher in developing countries than in developed ones
Higher GII more inequality
Countries that have high HDI tend to have a low GII

Question 25

maternal mortality rate

Answer 25

is the number of women who die giving birth per 100,000 births

Developing-171/ 100 000 live births

Developed- 16/100 000 births – most in sub Saharan Africa

Question 26

adolescent fertility rate

Answer 26

is the number of births per 1,000 women ages 15–19

The teenage pregnancy rate is below 10 per 1,000 in most European countries (and Canada)

110,1000- in developing

Question 27

Reproductive Health

Answer 27

The U.N. includes reproductive health as a contributor to G I because in countries where effective control of reproduction is universal, women have fewer children, and maternal and child health are improved

Question 28

Empowerment

Answer 28

In the context of gender inequality, empowerment refers to the ability of women to achieve improvements in their own status—that is, to achieve economic and political power

Question 29

The empowerment dimension of GII is measured by what two indicators?

Answer 29

1) Seats in the National Legislature: in every country of the world, more men than women hold position of political power
- More women than men vote
- Rwanda has national parliament with majority of women
- Highest % are in Europe, comprise a ¼ of nation parliament
- Lowest rates are in southwest Asia and Africa

2) Secondary School: worldwide, 54% of women have completed some secondary (high) school, compared to 64% of men
- For every 10 boys who attend high school in developing countries, only 6 girls attend
- Boys are ahead in Europe

Question 30

Self-sufficiency

Answer 30

Countries encourage domestic production of goods, discourage foreign ownership of businesses and resources, and protect their businesses from international competition

More popular

Question 31

International trade

Answer 31

Countries open themselves to foreign investment and international markets

Began more popular in 20th century

Question 32

Self-sufficiency example: India

Answer 32

Balanced growth- investment is spread as equally as possible across all sectors are regions

Import barriers- setting tariffs on imported goods to makes them more expensive

Import licenses

Quotas on imports (even with license)- limiting quantities of imports

Taxes (heavy taxes on imports)- double or triple price for consumers

Export limits- discouraged from making products to sell outside the country

Currency restrictions- Indian money could not be converted

Permits (to sell a new product, modernize a factory, set prices, hire/fire workers, etc)

Subsidies & government ownership- government owned insurance companies and car makers

Question 33

International Trade Path

Answer 33

calls for a country to identify its distinctive or unique economic assets.

What animal, vegetable, or mineral resources does the country have in abundance that other countries are willing to buy?

Canada- electricity lumber

The international trade path derives from a five step model proposed by W.W. Rostow in 1960.

Each country is thought to be in one of these five stages

Question 34

International Trade Path: Stages

Answer 34

The traditional society - high percentage of people engaged in agriculture and a high percentage of national wealth allocated to “nonproductive” activities ( e.g the military and religion)

The preconditions for takeoff - an elite group of well-educated leaders initiates investment in technology and infrastructure

The takeoff - Rapid growth is generated in a limited number of economic activities

The drive to maturity - Modern technology

The age of mass consumption - The economy shifts from production of heavy industry to consumer goods(motor vehicles)

South korea singapore and taiwan

Question 35

World Trade

Answer 35

During the late twentieth and early twenty-first centuries trade increased more rapidly than wealth (as measured by GDP), an indication of the growing importance of the international trade approach

Question 36

What were

Shortcomings of the self-sufficiency approach

Answer 36

Inefficient industries- businesses could sell all the products they made at high government controlled prices to customers that called for long waiting lists

Lack of competitiveness- companies were protected from international competition

Corruption- a large beaurocay

Black market

Question 37

Transition to International Trade

Answer 37

International trade attracted many developing countries during the late 20th century

Example: India dismantled many of its barriers to international trade: became liberal with permits (foreign companies could set up factories), reduced taxes and tariffs, and eliminated monopolies

After converting to international trade, India’s GDP per capita increased rapidly

Question 38

World Trade Organization

Answer 38

Countries representing 97 percent of world trade established the World Trade Organization (WTO) in 1995

The WTO enforces agreements designed to reduce barriers to international trade

Question 39

What have critics said about international trade?

Answer 39

Promotes the interests of large corporations

Compromises sovereignty of individual countries by transferring authority to other organizations

Question 40

Foreign Direct Investment

Answer 40

Finance comes from 2 sources direct investment and loans

Investment made by a company based in one country in the economy of another country is known as foreign direct investment (FDI)

Foreign direct investment grew from $172 billion in 2002 to $646 billion in 2016

FDI does not flow equally around the world

Most FDI originates in developed countries

USA is leading source of FDI investment

China receives FDI

Question 41

What are major sources of FDI and loans

Answer 41

The major sources of FDI are transnational corporations that invest and operate in countries other than the one in which the company headquarters are located

An alternative source of loans is microfinance, which is provision of small loans and other financial services to individuals and small businesses in developing countries

Question 42

The Grameen Bank, Bangladesh

Answer 42

Microcredit program that focuses on improving the status of landless and poor people (particularly women)

Began as a research project (1976) and became a bank in 1983

Seeks to enhance the social and economic status of those in need

Average loan is about $300

Loan applicants form groups (collective responsibility) and meet with bank officials

Recovery rate is 98%

About 10,000 microfinance institutions around the world today

Question 43

What are the two major lenders?

Answer 43

he World Bank and the International Monetary Fund (IMF)

Question 44

Why do countries borrow money?

Answer 44

Developing countries borrow money to build new infrastructure, and in theory this will make conditions more favorable for domestic and foreign businesses

Half of the loans have gone to seventeen countries, including nine in Africa

Question 45

Fair trade

Answer 45

international trade that provides greater equity to workers, small businesses, and consumers

Question 46

Who does the each of the 2 standards that distinguish fair trade apply to?

Answer 46

Workers on farms and factories

producers

Question 47

Female labor force participation rate

Answer 47

• percentage of women who have full time jobs. the numbers may vary around the world especially in developing countries such as south/southwest asia and north africa where there are large gaps, in east asia and sub-saharan africa there are small gaps.

Question 48

Economic, social, environmental goals of fair trade

Answer 48

aising the incomes of small-scale farmers and artisans by eliminating some of the middlemen (Figure 10.10.1).
• Distributing the profits and risks associated with production and sale of goods more fairly among producers, distributors, retailers, and financiers.
• Increasing the entrepreneurial and management skills of the producers (Figure 10.10.2).
• Promoting safe and sustainable farming methods and working conditions, such as by prohibiting the use of dangerous pesticides and herbicides and promoting the production of certified crops

Question 49

Sometimes the producers join cooperatives which offer advantages:

Answer 49

The cooperative can qualify for credit so that funds can be borrowed to buy equipment and invest in improving farms.
• Materials can be purchased at a lower cost.
• The people who grow or make the products democratically manage allocation of resources and assure safe and healthy working conditions.
• Profits are reinvested in the community instead of going to absentee corporate owners.

Question 50

What are Fair trade standards?

Answer 50

Paid fair wages, at least enough to cover food, shelter, education, health care, and other basic needs (Figure 10.10.3).
• Permitted to organize a union and to have the right to collective bargaining.
• Protected by high environmental and safety standards.