Development

Question 1

What is Economic Development?

Answer 1

Economic Development is the increase of GDP per capita resulting in improving standards of living helping individuals to escape absolute poverty further improving health and education.

Question 2

Why is economic development beneficial for developing countries? (2)

Answer 2

• helps people escape absolute poverty so people are able to afford basic needs
• economic growth results in better healthcare + education as education is usually privatized in developing countries so more families will be able to afford to send their children to school.

Question 3

Why is economic development not as beneficial for developed countries? (2)

Answer 3

• Developed countries at present have high living standards so an increase in GDP doesn’t improve access to necessities or education/ healthcare. ( state-owned in the UK )
• People would need to work longer hours to produce higher output for economic growth to occur, which may lead to a decrease in the quality of life of a person.

Question 4

What is meant by quality of life?

Answer 4

a subjective term that can measure happiness
factors vary from person to person
e.g. some people want job satisfaction whilst others value family time.

Question 5

What is the relationship between economic growth and development?

Answer 5

• development is impossible without growth this is because an increase in the wages of workers (as a result of economic growth) will result in increased tax revenue collected by the government which can then be allocated to welfare.

Question 6

Why do developing countries tend to have poor welfare services?

Answer 6

• Resources are not allocated to welfare (education + healthcare) for the reason that developing countries suffer from corruption from weak legal systems.

Question 7

What determines the structure of an economy?

3

Answer 7

• primary sector
• secondary
• tertiary sector

Question 8

What is the primary sector?

Answer 8

• the sector in which production uses natural resources, including the extraction of raw materials and growing crops

Question 9

What is the secondary sector?

Answer 9

• the sector involved in the production of manufactured goods.

Question 10

What is the tertiary sector?

Answer 10

• the sector involving the production of services e.g. information technology + financial services

Question 11

How can an economy move to the tertiary sector?

Answer 11

When human capita becomes more skilled

• an increase in education allows individuals to obtain the skills needed for work.
  There will be higher-skilled workers who can work in areas such as investment banking.

Question 12

What occurs in the early stages of economic development?

Answer 12

• Economies operate in the primary sector
• natural resources are depleted, these resources are scarce.
• Impacts future generations for the reason that there will be fewer resources available.
• Capital stock is reduced, depleting capital
• So development is not sustainable

Question 13

How does economic growth result in environmental degradation?

Answer 13

• people have higher wages
• now able to spend on big-ticket items (cars, holidays)
• leads to increased pollution from fuel of cars + planes.
• increased demand for big-ticket items further depletes more natural resources as more cars are being manufactured to meet the increasing demand

Question 14

Why do developing countries have a strong primary sector?

Answer 14

• because of low levels of skill

Question 15

What is the issue with the exports of countries predominantly being agricultural commodities?

Answer 15

• the price of commodities can fall so the government will not collect enough tax revenue to reinvest in welfare

Question 16

What is environmental degradation?

Answer 16

• the deterioration of the environment through depletion of resources e.g water, soil, pollution,extinction

Question 17

What is a commodity?

Answer 17

• an economic good
• often used as inputs in the production of other goods and services
  e. g. gold, natural gas, oil

Question 18

What is meant by sustainable development?

Answer 18

• development that meets the wants and needs of the economy at present without compromising the needs and wants of future generations.

Question 19

What is meant by Millenium Development Goals (MDGs)?

Answer 19

• targets set for developing countries reflecting a range of different objectives monitored each year

Question 20

What are the MDG’s highlighted in the 2000’s UN summit?

Answer 20

• eradication of absolute poverty
• universal primary education
• promoting gender equality and empower women
• reduce child mortality rates
• improve maternal health
• combat + reduce diseases
• ensure environmental sustainability

Question 21

Draw Kuznets curve and what it relates to?

Answer 21

• illustrates relationship between environmental degradation and GDP per capita

Question 22

What are the factors influencing growth + development? (7)

Answer 22

• political institutions
• education
• infrastructure
• technology
• level of poverty
• income distribution
• access to credit/ banking

Question 23

How do political institutions influence growth + development?

Answer 23

• strong legal systems provide checks + balances to prevent corruption.
• protection of private property + intellectual property rights + protection by patent encourage entrepreneurship.
• More production as rights are secure

Question 24

How does education influence economic growth + development?

Answer 24

• Higher education standards, give labour improved skills to increase productivity.
• e.g. Singapore ranks first in global education rankings (PISA) test as a result have seen growth in areas of Technology and IT

Question 25

How does infrastructure influence economic growth + development?

Answer 25

Improvement in infrastructure attracts foreign investment as for example better railway services lower costs of transporting goods/services.
- Increases employability when firms invest , which increases tax revenue furthering growth

• Faster commute times from highspeed rail links such as HS2 ( transport links between major cities such as Birmingham, Manchester and Leeds) labour will be happier and more productive.

Question 26

How does technology influence growth + development?

Answer 26

• Improvement in the quality of capital

Helps to speed up production process, further increasing productivity

Question 27

How much inward investment did Brazil receive in 2011?

Answer 27

$101bn

Question 28

How does the level of poverty influence growth + development ?

Answer 28

High levels of absolute poverty suggest many cannot afford basic necessities.
- More likely to suffer from malnutrition and subsequent premature death.
Results in: Human capital depletion + lower productivity levels

Question 29

How does income distribution influence growth + development?

Answer 29

• Education is typically privatised in developing countries , so those who cannot afford to go to receive education are not able to be socially mobile and acquire the skill levels needed to work in the tertiary sector. This is intergenerational poverty.

Question 30

How does access to credit/ banking influence growth + development?

Answer 30

• Developing countries operate in the primary sector; agricultural workers e.g. rural farmers don’t have documents to prove their financial history as wages are given as cash in hand.
• unable to receive loans so enterprise is reduced.