Economic Pursuits Flashcards
What is Economic Growth?
Economic growth consists of growth in the real GDP and implies an increase in the capacity of the economy to produce more goods and services
What is Economic Development?
Economic development consists of growth in the real per capita GNI and implies an increase in the capacity of the population to produce more goods and services
What is the difference between economic growth and economic development?
Economic growth: -focuses on economy's capacity -focuses on the increase in gdp -limited government intervention -measured in terms of real GDP Economic development: -focuses on the population capacity -focuses on the standards of living -justified government intervention -measured in terms of per capita GNI
What are the measures of development?
- Real per capita GNI
- Literacy levels
- Life expectancy
How where people grouped in terms of living standards?
- First world countries
- Second world countries
- Third world countries
What where first world countries?
- western countries in the northern hemisphere
- Highly developed and industriallised
- citizens enjoy high standards of living
What where second world countries?
- Former communist countries of eastern europe and china
- Generally poor countries
- Relatively low standards of living compared to first world countries
What where third world countries?
- mostly situated in the southern hemisphere
- known as developing countries
- population lives in poverty
What is the IMF?
It focuses on countries with balance of payments problems
How does the IMF group countries?
Into 3 groups:
- Industrialised countries
- Developing countries
- Transitional economies
What are Industrial countries?
- consist of high levels of GDP and per capita GNI
- They have large manufacturing and services sectors
What are developing countries?
- they have large primary sectors, low levels of GDP and per capita GNI
- A major portion of citizens exist near subsistant levels
What are transitional economies?
- previous communist countries of eastern europe, including Russia
- Middle income levels
- Manufacturing declining economies
How does the world bank measure countries?
- High income countries
- Upper middle income countries
- Lower middle income countries
- Low income countries
How does the UN distinguish groups of countries?
- Very high human development
- High human development
- Medium human development
- low human development
