Economic development- MM

Question 1

What are the 3 categories of global economies?

Answer 1

1) Developed economies
2) Emerging economies
3) Developing economies

Question 2

What is a developed economy?

Answer 2

Characterised by high levels of real GDP per capita, national output dominated by tertiary sector (services=main produce)

Question 3

What are emerging economies?

Answer 3

Real GDP per capita far lower than developed, but growing, significant levels of income inequality & some pockets of extreme poverty, national output dominated by secondary sector (manufacturing=main produce)

Question 4

Where are some emerging economies?

Answer 4

Asia, North Africa, South America

Question 5

What are developing economies?

Answer 5

Real GDP per capita very low & high % of population in extreme poverty
Dominated by primary sector (agri, mining etc)

Question 6

Where are some developing economies?

Answer 6

SSA mainly, but also Pacific islands & The Caribbean

Question 7

What measures the development of an economy?

Answer 7

Human development index (HDI)

Question 8

What are the 3 components of the HDI?

Answer 8

1) Real GNI per capita
2) Adult literacy rate (measures education)
3) Life expectancy at birth (measures health)

Question 9

What is a developed economy’s key economic objective?

Answer 9

Economic growth

Question 10

What is an emerging economy’s key economic objective?

Answer 10

Development (including GNI per capita- integral)

Question 11

What are 4 reasons that growth might not lead to improved standards of living & therefore unsustainable growth?

Answer 11

1) Inequality- growth may only effect small parts of population
2) Government failure- corrupt/ highly inefficient
3) Driven by FDI- capital flight may occur
4) Driven by extraction of non-renewable resources, and cause irreparable harm to the environment (short-term benefits)

Question 12

What is sustainable growth/ development?

Answer 12

Growth/development that meets the needs of the present without compromising the ability of future generations to meet their needs

Question 13

How many sustainable development goals have the UN & World Bank set for every country?

Answer 13

17

Question 14

What are 4 good examples of emerging economies?

Answer 14

1) India
2) China
3) Brazil
5) Mexico

Question 15

What is the range of developing economies?

Answer 15

Some are close to being developed, others are close to developing (China vs Bangladesh)

Question 16

What are 3 reasons emerging economies benefit developed economies?

Answer 16

1) Most MNCs are from developed economies- emerging markets provide large customer bases, ↑ profits
2) MNCs engaged in offshoring to emerging economies
3) Improved education/training systems provide skilled labour for developed

Question 17

What are 2 reasons emerging economies harm developed economies?

Answer 17

1) Offshoring led to large-scale job losses in developed economies, ↑ structural unemployment & created many social problems
2) Benefits experienced by MNCs in developed economies remain for rich people, ↑ income & wealth inequality

Question 18

What are 2 reasons emerging economies benefit developing eceonomies?

Answer 18

1) Physically closer, so more likely to trade with them as they also demand a larger % of natural resources produced by developing economies (industrialisation)
2) MNCs from emerging economies more likely to target developing markets to improve consumer choice in developing economies

Question 19

What are 2 reasons emerging economies harm developing economies?

Answer 19

1) Emerging economies are more attractive destinations for FDI, crowding out FDI for developing economies
2) Some emerging economies (China & Russia) use their ↑ power to exploit developing economies for themselves