economic growth and development Flashcards
define economic growth
a sustained rise in a countries productive capacity over a period of time
define economic development
an improvement in economic and social living standards, such as life expenctancy, literacy rates, infant mortality rates, years of schooling and access to technology
what is the difference between GDP and GNP
gross domestic product is the total value of goods and services produced within a country by all firms and citizens
gross national product is the total value of goods and services produced by the firms and citizens belonging to a particular country
GNP will ignore any goods and services made bt firms or citizens within a country who belong to another country, but will include goods and services made in other countries who belong to its country
problems with measuring economic development
using GDP/GNP - it is difficult to collect exact national income figures and they ignore externalities (positive and negative) figures may also be collected differenty between countries, making it difficult to compare
calculated by GDP per capita means the mean can be distorted by outliars in the data
what are purchasing power parity adjustments
differnt countries use different currencies
to compare between countries, GDP figures may be converted into a common currency to see how much it would cost to by the same basket of goods in different countries
what is the human development index
include groups of data to gain a more accurate view on economic development
- life expectancy
- mean years of schooling
- national income per capita
figures are then statistically converted to an overall number between 0 and 1, the closer to 1, the more developed a country is
what are the diiferent ways that economic development can be indirectly measured
the porportion of the population who have access to healthcare
proportion of population who have access to education
proportion of poeple who have access to the internet
proportion of poeple who have access to mobile phones
what working structure do developed countries have
larger tertiary sector and a smaller primary sector
what working structure do developing countries have
larger primary sector and a smaller tertiary sector
what are the unites nations milennium development goals
the UN set eight goals for world development
eradicate extreme poverty and hunger
universal primary education
promote gender equality
reduce child mortality
improve mental health
combat HIV/AIDS malaria and other diseases
endure environmental sustainability
global partnership for development
difficulties for LEDC’s in raising their level of economic development
lack of resources
low levels of healthcare
low levels of education
low life expectancy
MEDC’s trade policies
poor infrastructure
lowlevels of capital
lack of access to technology
poor governance
high public sector debt
rapid population growth
what is the resource curse (dutch disease)
occurs when a country is endowed with natural resources, however exploiting the resource does not improve economic growth and living standards
this resource can be exported, which causes an appriciation of the currency (as there is more demand for it), this cuases exports to become more expensive, reducing the demand for the export, as well as other goods exported by the country
imports become cheaper, so there is more demand for these, harming the domestic industries
what approaches can be used for economic development
liberalisation - removal of protectionism policies to promote free trade
international aid - giving capital equipment will increase economic growth
international debt relief - allowing a developing country to spend its money on itself rather than repay developed countries
government policies - such as subsidising exports, encouraging industrialisation and encouraging foreign direct investment
