Development Gap & Patterns, Exports and Imports, Globalisation, Multinational companies

Question 1

1. What is development?

Answer 1

The process of change for the better this can be:

• economic.
• social.
• political.

Question 2

2. What does the term ‘development gap’ mean?

Answer 2

The widening difference of development between rich and poor.

Question 3

3. What is the world bank?

Answer 3

An international financial institution that provides loans to developing countries for capital programmes.

Question 4

4. What is the development continuum?

Answer 4

A linear scale from high developed countries to those with a low level of development.

Question 5

5. What 4 categories of wealth does the world bank place countries in?

Answer 5

• High income countries (HIC’s.)
• Upper-middle-income countries.
• Lower-middle-income countries.
• Low income countries (LIC’s.)

Question 6

6. Gross domestic product (GDP) is one way to measure economic development. What is it?

Answer 6

The total value of all goods and services produced within a country in a year (Total value of the economy)

Question 7

7. The average wage of a countries population is known as…

Answer 7

Gross national income (GNI)

Question 8

8. Give 2 other ways we can measure economic development.

Answer 8

• 𝐏𝐨𝐯𝐞𝐫𝐭𝐲: The percentage of the population that earn less than $1.90 per day according to the world bank.
• 𝐄𝐦𝐩𝐥𝐨𝐲𝐦𝐞𝐧𝐭 𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞: The type of work people do (Primary-Like farming, Secondary-Factory work or tertiary -Services)

Question 9

9. What is Purchasing Power Parity (PPP)?

Answer 9

A way of comparing the average wealth of a country by taking the cost of living in those countries into account it converts the GNI into a figure that describes what that money will buy in local prices.

Question 10

10. What are the limitations of using economic measures of development?

Answer 10

• They measure only wealth and do not include social factors.
• They do not recognise the inequality within a country.
• Without PPP it does not consider the cost of living and what people can afford within that country.

Question 11

11. What does NIC stand for? Can you give a named example of one?

Answer 11

Newly industrialised country - India, China, Mexico, Brazil.

Question 12

12. Malawi is an example of an LIC country which is landlocked what does this mean?

Answer 12

It has no coastline and therefore has no sea ports.

Question 13

13. What key issue does being landlocked create for Malawi?

Answer 13

Difficulty trading with other countries.

Question 14

14. What types of products does Malawi export?

Answer 14

Low value goods:

• Tobacco.
• Tea.
• Cotton.
• Sugar.

Question 15

15. What types of products does Malawi import?

Answer 15

High value products:

• Oil.
• Farm machinery.

Question 16

16. What to HIC’s export?

Answer 16

Manufactured goods.

Question 17

17. What do LIC’s export?

Answer 17

Primary goods.

Question 18

18. What is globalisation?

Answer 18

The process by which the world’s economies, societies and cultures have become integrated through communication, transportation and trade.

Question 19

19. What 4 factors drive globalisation?

Answer 19

• MNC’s (Multinational companies.)
• Communication technologies.
• Trade.
• Culture.

Question 20

20. Give 5 ways that NIC’s such as India and China benefited from globalisation?

Answer 20

• Rapid economic growth.
• Cheap labour so manufacturing industry boomed.
• Changes in technology so they can invest and encourage MNC’s to locate to them.
• Flows of people (e.g. Migration).
• Flows of idea and culture (e.g. Bollywood).

Question 21

21. Give 5 reasons MNC’s such as Nike locate to NIC’s & LIC’s.

Answer 21

• Weaker legislation on staff safety welfare and environment.
• Lower labour costs.
• Reduced costs of buildings and land.
• Government incentives.
• Closer to markets where goods are sold.

Question 22

22. What are the positives of MNC’s such as Nike locating to NIC’s & LIC’s?

Answer 22

• Investment provides jobs and skills for local people.

- Multiplier effect.

Question 23

23. What are the negatives of MNC’s such as Nike locating to NIC’s & LIC’s?

Answer 23

• Profits sent back to HIC where the MNC is based.
• MNC’s can drive out local businesses.
• If the MNC decides to close its factory to relocate people can be made redundant.
• Lack of laws mean that they operate in a way that they wouldn’t be able to in a HIC (e.g polluting rivers, Sweatshop conditions for workers etc.)

Question 24

24. What country did you study for where Nike produces sportswear?

Answer 24

Vietnam.

Question 25

25. What other MNC have you studied?

Answer 25

Tata Steel.

Question 26

26. What is Foreign Direct Investment?

Answer 26

Investment from overseas into NICs from MNCs.

Question 27

27. What are trade blocs? Can you give an example of one?

Answer 27

Trading partnerships between different countries (e.g European Union, NAFTA (North American Free Trade Agreement))