Chapter 9 Flashcards
What is the Human Development Index?
To measure the level of development for every country, created by the UN
What are 3 factors when considering the Human Development Index?
Decent standard of living, a long and healthy life, and access to knowledge
Define GNI (gross national income) per Capita
measures the average wealth of a country that account for value of output of goods and services per person Relates to development
While regular GNI accounts for the total country and relattes to economy
Define Purchasing Power Party:
adjustment made to the GNI to account for differences among countries in the cost of goods
Define Primary Sector:
activities that extract materials from Earth through Agricultural means, a large percentage found in Developing Countries
Define Secondary Sector:
- Manufactures process, transform, and assemble raw materials into products,
- decreased sharply in Developed countries and grows in developing countries
Define Tertiary Sector:
provisions of goods and services in exchange for payment, a large percentage found in developed countries
Define Productivity:
amount that can produced by the average worker in a given amount of time
Define Value Added:
gross value of a product minus the cost of raw materials and energy
Why are workers in MDC more productive than LDC?
Workers in MDC have access to more machines, tools, and equipment
What does a low level of IHDI mean?
Reflects a low level of economic quality and conversely a high level of inequality
Identify the regions with the highest and lowest numbers of people per item:
Motor Vehicle- high in N.America low in S.Asia
Cell Phones- high in Europe low in Sub-Saharan Africa
Internet- high in N.America low in S.Asia
Define Infrastructure:
underlying system essential to the functioning of society, or to certain activities
Define Life Expectancy:
an average number of years an individual is expected to live
What demographic phenomenon has occurred in developed countries as result of longer life expectancy?
How is this a problem?
Developed countries have a higher percentage of older people, and a low % of children under 15. leaves a few amount of people in the working force and high amount of dependents
How do infant mortality rates compare to those in MDC VS LCD?
More in are likely to live in MDC, in LDC infants have a high chance of death due to malnutrition and lack of medicine
How does life expectancy compare in MDC VS LCD?
In developed countries life expectancy is higher than LDC because of healthcare and resources
What is the expected gap between students in MDC VS LDC?
In MDC students are expected to attend college while in LDC students are expected not to finish high school
Where is development concentrated in N.Africa and SW.Asia?
states that border the Persian (Arabian) Gulf
Where is development highest and lowest in Brazil?
high in along Atlantic coast
low in the interior of Amazon tropical rainforest
Where is development highest and lowest in China?
high along east coast
low in remote and inhospitable Mts./ deserts
Where is development highest and lowest in Mexico?
high in the region bordering its wealthy neighbors
low in urban areas
From what region were 3 of the 5 MDC in 2015?
What are the last two countries?
Eastern Europe and Denmark and Netherlands
Least Developed Regions (Periphery) Developing Regions (Semi-Periphery) Developed Regions (Core)
Sub-Saharan, S.Asia, SW. Asia, N.Africa, and SE.Asia
Russia, Latin America, E.Asia, and Central Asia
South Pacific, N.America, Japan and Europe
Define GDP (gross department product):
Gross Domestic Product:
goods in a home country; accounts for products that enter and leave
What factors make-up the gender inequality index?
Empowerment, labor, and reproductive-health
What are the highest and lowest Gender inequality index scores found?
Highest found in Developing countries (Sub-Africa, S. Asia, Central Asia)
Lowest found in developed countries (Western Europe)
What is empowerment?
What 2 factors are measured to determine the level?
Refers to the ability of women to obtain economic and political power
- The % of seats of seats held by women in the national legislature
- The %of women who completed highschool
Identify 3 examples of how gender inequality is greater in the US than other MDCs
- Reproductive rights are lower
- % of women in national legislature is much lower
- women wages are lower
Which 3 resources take up most of the worlds energy?
Coal, Petroleum, and Natural Gas
Which 2 countries use the largest energy?
China and USA
Which region has the largest per capita energy?
North America
Where are the largest concentrations of coal, petroleum?
In coal larger by mid latitude areas
In petroleum around Persian Gulf, North Sea, and largest producers are Saudi Arabia, US, Russia
What is OPEC and when was it created
Created in 1960
(Organization Petroleum Exporting Countries)
Formed to enable oil-rich developing countries more control over their resources, make more profits from oil
What was the effect of OPEC oil prices in 1970s and how did US react?
- oil prices increased sharply
- the US reduced its dependency on imported oil, the share of imports from OPEC countries decline
- led to an energy crisis in the US and a long lines for rationing of gas
Identify the elements of Nuclear Energy:
Benefit: large amount of energy released from a small amount of material
Drawbacks: radioactive waste, potential for catastrophic events
Availability: limited and high cost,
US, Russia, Japan, and France produce large amounts
Identify the elements of Hydroelectric energy:
Benefit: been around for a long time
Availability: getting electricity from water
Identify the elements of Biomass:
Benefit: derived from plant and animal decay
Drawback: made from corn in the US, sugar in Brazil, inefficient because energy that is made is is the same as the burning amount
Ethanol is considered dirty
Identify the elements of Geothermal:
Benefit: the most feasible and very clean
Drawbacks: limited to volcanic areas or areas with tremendous heat
Identify the elements of Nuclear Fusion:
Benefit: releases a spectacular amount of energy, no radioactive waste
Drawbacks: cam only occur at high temp.
Availability: not yet commercial
Identify the elements of Solar Energy:
Benefit: LDCs have the ability to obtain electricity and generate energy
Availability: limitless and humans cannot destroy it
Drawbacks:equipment is expensive and bulky,
Identify the elements of a Self-Sufficient model:
• Barriers limit the import of goods from other places
- Setting high taxes on imported goods
- Fixing quotas to limit quantity
- Requiring licenses in order to restrict number of goods
• Isolation from competition to encourage a business to achieve independence
• Investment is spread equally across all sectors of economy and regions
• Income in the country side keeps pace with those in the city
• Tariffs, quotas, license requirements
(Protectism, Import, Substitution)
Identify the elements of Rostows model
(International Trade):
- Traditional Society
- High % of people engaged in agriculture not yet developed - Preconditions of Takeoff
- Elite group initiates innovative economic activities; invest in infrastructure and comparative adv. - Takeoff
- Rapid growth is generated in a limited number of economic activities (textiles or food products) Where other sectors of the economy remain dominated by traditions - Drive to Maturity
- Modern technology that was confined is now diffused to a wide variety of industries - Age of Mass Consumption
- Economy shifts from heavy industry (steel and energy ) to consumer goods and tertiary activities
-Countries should invest in Comparative Advantages and infrastructure
What are problems and criticism in the Self-Sufficient model:
- Companies protected from international competition were not pressured to change
- Little incentive to improve quality, lower production cost, reduce prices, or increase production
- Potential entrepreneurs found struggling to produce goods or offer services was less rewarding
- Government abuses / large bureaucracies
What are problems and criticism in Rostows model
(International Trade):
- Uneven distribution of resources
- Increased dependence on developed countries
- Market decline; stagnant demand may decrease global prices (oil glut )
- Does not protect new industries that may need it
What is the case study of India:
India
- To import goods in India, most foreign companies had to secure a license
- The gov. imposed heavy taxes on imported goods which doubled or tripled prices to consumers
- Indian business were discouraged from producing goods to export
- Indian money could not be converted
- A business needed gov. permission to sell a new product, modernize a factory, expand production, set prices, hire/fire workers
- If private companies could not make a profit inside India the gov. provided subsidies
- used this method until late 20th century
What is the case study for the Persian Gulf and 4 Dragons:
Persian Gulf States
- Used petroleum revenues to finance large-scale projects, such as housing and airports
- Landscape has been changed by the diffusion of consumer goods such as motor vehicles and electronics (vehicles, motorcycles, etc)
- Supermarkets are stocked with food imported from Europe and North America
- Since 1970s used “petrodollars” to build infrastructure
Four Asian Dragons (Tiger)
- First places to adopt the international trade:
(South Korea, Singapore, Taiwan, and Hong Kong)
- Large cities surrounded by very small amounts of rural land
- Lack many natural resources
- Promoted development by concentrating on producing a handful of manufactured goods
- Comparative adv:
Low labor cost enabled countries to sell products inexpensively
What are the two principal ways in which LDCs obtain money to finance development?
a. –Direct investment by Transnational Corporation
(Multinational) corporations open factories or other operations
b. – Loans from World banks and International Organization
(World Bank: long term dev. Loans) (IMF: Bailout/ rescue funds with conditions)
Identify the two main sources, both controlled by MDCs, of loans for LDCs.
a. World Bank
b. international monetary fund
In PRACTICE, what has usually happened when loans have been used for these infrastructure projects?
THEY FAIL
- Projects don’t function because of faulty engineering
- New infrastructure dies not attract other investment
- Recipitent nations squander or spend aid on armaments.
What are structural adjustment programs (austerity)?
Reduce govt spending, privatization, charging for services
Define: Foreign Direct Investment
When multinational corp. make an investment to a foreign company in the economy of another country
Compare and contrast the approaches to dealing with economic recession (Stimulus vs Austerity)
Stimulus: gov. should spend when everyone else is afraid to /keep $ circulating
Austerity: lower gov. spending by cutting services / lower taxes to get more money circulating
Summarize Europe’s sovereign debt crisis in 3 bullets
Most adopted in Europe 1999
Prevented weaker economies from manipulating currency to make their goods cheaper for int. trade
Gov. in peripheral countries (Greece) experienced severe ec-problems and began to default on sovereignty (gov.) debt after housing bubble burst in the US
