Development economics

Question 1

appropriate technology

Answer 1

-technologies well suited to a country’s particular economic, geographical, ecological and climate conditions

Question 2

composite indicator

Answer 2

summary measure of more than one indicator, often used to measure economic development
ex) HDI that measures income, education and health indicators

Question 3

concessional loan

Answer 3

loans that are offered as part of foreign aid, made on concessional terms; they are offered at interest rates that are lower than commercial rates, with longer repayment periods

Question 4

conditional assistance

Answer 4

development assistance provided by bilateral or multilateral development organizations, which is extended to countries on condition that they satisfy certain requirements, usually requiring that they adopt particular policies

Question 5

development aid

Answer 5

foreign aid intended to help economically less development countries; may involve project aid, programme aid, technical assistance or debt relief

Question 6

dual economy

Answer 6

arises when there are two different and opposing sets of circumstances that exist simultaneously, often found in economically less developed countries, such as wealthy, educated groups co-existing with poor, illiterate groups

Question 7

economic development

Answer 7

• broad-based rises in the standard of living and well-being of a population, particularly in economically less developed countries
• involves increasing income levels and reducing poverty, reducing income inequalities and unemployment, and increasing provision of access to basic goods and services such as food, education, health care

Question 8

economically less developed countries

Answer 8

countries that have a per capital GNI below a particular level (which changes from year to year) according to World Bank’s classification system

Question 9

economically more developed countries

Answer 9

countries that have a per capital GNI above a particular level according to World Bank’s classification system

Question 10

export promotion

Answer 10

• a growth and trade strategy where a country attempts to achieve economic growth by expanding its exports
• looks outward towards foreign markets and is based on stronger links between the domestic and global ecnomics

Question 11

foreign aid

Answer 11

consists of concessional financial flows from the developed world to economically less developed countries, and includes concessional loans and grants

Question 12

foreign debt

Answer 12

refers to external debt, meaning the total amount of debt (public and private) incurred by borrowing from foreign creditors

Question 13

FDI (foreign direct investment)

Answer 13

• refers to investment by firms based in one country in productive activities in another country
• firms that undertake FDI are “multinational corporations”

Question 14

GNI per capita

Answer 14

gross national income divided by the number of people in the population; an indicator of the amount of income in an economy per person in the population

Question 15

grant

Answer 15

a type of foreign aid consisting of funds that are in effect gifts (they don’t have to be repaid)

Question 16

green GDP

Answer 16

gross domestic product which has been adjusted to take into account environmental destruction and/or health consequences of environmental problems

Question 17

HDI

Answer 17

a composite indicator of development which includes income per capita, levels of health and educational attainment; is considered to be a better indicator of development than single indicators such as GNI per capita

Question 18

humanitarian aid

Answer 18

foreign aid extended in regions where there are emergencies caused by violent conflicts or natural disaster such as floods, earthquakes and tsunamis, intended to save lives, ensure access to basic necessities such as food, water, shelter and health care, and provide assistance with reconstruction

Question 19

import subsittution

Answer 19

• refers to a growth and trade strategy where a country begins to manufacture simple consumer goods oriented towards the domestic market (such as shoes, textiles, beverages) in order to promote its domestic industry
• it presupposes the imposition of protective measures (tariffs, quotas, etc.) that will prevent the entry of imports that compete with domestic producers

Question 20

IMF (International Monetary Fund)

Answer 20

an international financial institution whose purpose is to make short-term loans to governments on commercial terms (non-concessional) in order to stabilize exchange rates, alleviate balance of payments difficulties and help countries meet their foreign debt obligations

Question 21

micro-credit

Answer 21

• a programme to provide credit (loans) in small amounts to people who don’t have access to credit
• short repayment periods

Question 22

MDGs

Answer 22

• eight development goals adopted by the Millennium Declaration of 2000
  ex) eradicating extreme poverty and hunger, achieving universal primary education, reducing child mortality, promoting gender equality

Question 23

multilateral development assistance

Answer 23

lending to developing countries to assist their development on non-concessional terms by multilateral organizations
ex) World Bank, IMF

Question 24

multinational corporation (MNC)

Answer 24

• a firm involved in foreign direct investment (FDI)

- based in one country (home country) and undertakes productive investments in another country

Question 25

non-governmental organizations (NGOs)

Answer 25

• non-profit organizations that provide a very wide range of services and humanitarian functions
• provide foreign aid in the form of grants in developing countries
• involved with emergency assistance, promotion of sustainable development, poverty alleviation, protection of child health, provision of technical assistance, etc