definitions Flashcards
1
Q
what are the 4 types of unemployment?
A
- structural
- cyclical
less of a problem:
- seasonal
- frictional
2
Q
what is primary product dependency, and who is the thinker who argues it is an issue?
A
- dependency on raw materials such as oil or crops
- prebisch- singer
- in the long run the price of primary products will decrease with respect to the price of manufactured goods
- as a countries income increases, demand for manufactured goods increases much more than demand for raw materials
3
Q
explain the logic of the savings gap. who came up with this model?
A
- lower incomes
- less saving
- banks have fewer deposits to lend
- less investment
- less growth
Harrod Domar
4
Q
what is the lewis model?
A
- a country switches to the production of manufactured rather than agricultral goods
- the lewis model assumes there is no oppertunity cost to
- this will increase profits, leading to higher wages, attracting more workers
5
Q
what did milton freedman say about inflation?
A
“infation is always and everywhere a monetary phenomenon”
6
Q
what is transfer pricing?
A
- used by MNC’s
- manipulating the prices charged on goods transfered between parts of the same company
- aim is to reduce the total coorperation tax payed
- MNC’s are ‘footloose’ so are able to move between countries at a low charge
7
Q
how is the CPI measured?
A
- basget of goods, chosen through a consumer survey
- goods are weighted based on the proportion of the income that they take up
- prices are measures and average price change is calculated
- a base year is chossen
8
Q
what are the components of HDI?
A
- life expectancy at birth
- mean years in education
- gross national income
9
Q
how is HDI measured?
A
- each component (health, education and income) are given equal weight
- normalized on a scale between 0 and 1
- 1 being the best possible score
10
Q
what does HDI not include?
A
- gender equality
- democracy
- environmental factors
