Economic Development Flashcards
Real GNI/GDP per capita gives an indication of?
standards of living
What does national income not incorporate?
quality of life e.e. leisure time, health
hidden economies
What does a HDI above 0.8 indicate?
a high level of human development
What is said to be an inevitable consequence of development?
inequality within a country
How does inequality slow down economic development?
poor people struggle to start businesses or have banking
higher income people will spend on imports or invest abroad, so the money will leave the economy
What are factors causing inequality?
wage and tax levels unemployment levels education levels property ownership and inheritance laws level of government benefits
What is the formula for the Gini coefficient?
G = A / (A+B)
What is the Fini coefficient for perfect equallity?
0
Why does poor infrastructure make difficult for an economy to grow?
energy supplies may be unreliable
transport links may be poor
telephone and internet services are scarce
What 2 things can cause human capital inadequacies?
disease/poor healthcare system
lack of education
What is the ‘savings gap’?
the gap between the level of domestic savings in an economy and the investment needed to grow that economy
What is capital flight?
when people start holding their savings abroad, often due to high tax rates or political instability
What are the disadvantages of primary product dependency?
demand and supply for primary products is inelastic, so slight changes in either can cause big fluctuations in price and hence incomes of producers
this uncertainty make investment unattractive
What are the 3 different strategies for helping countries to develop?
aid and debt relief
structural change
policies favouring either interventionist or market-orientated approach
What is bilateral aid?
when a donor sends aid directly to the recipient country
