Economics Theme 2.4.2 Flashcards
What are the impacts of developing countries producing in less developed countries
Developed countries have utilised developing countries as a source of cheap production in terms of lower costs of raw materials and labour
production costs and lower inflationary pressure generated as a consequences has improved the real incomes of consumers of developed countries and boosted their standard of living
The decline of manufacturing in developed countries has led to reduced negative externalities in production in those countries (spill over costs)
However, many developed countries have experienced structural unemployment as a consequences of businesses
What has happened in developed countries as a result
raditional western nations, including the UK, have seen a period of deindustrialisation occur as comparative advantage in the production of many goods has shifted to China, India and the Far East
How has there been an emergance of middle income counties
Countries such as Brazil, India and China have become significant global players in terms of all aspects of trade
The collapse of communism in Russia and other Eastern bloc states has opened up global markets significantly
How have they managed to become middle income countries
They have utilised their abundant natural resources to help develop their economies
They have utilised their abundant human resources to help increase the supply of goods and services
What has been the effect of increased trade
increasing trade has enabled developing countries to participate more effectively in the global economy. Many have become more integrated into competitive markets and have generated significant income and wealth for their citizens
This increased income and wealth has led to the creation of job opportunities, which can assist in the reduction of poverty
How is it hard for developing countries to get acess to the large markets
However, many developing countries may find it hard to access large markets if they are not members of that trading block. For example, producers of agricultural products in African nations will have to pay large import duties to sell their products in the EU because the Common External Tariff
what has been a sideffect of rapidly developing countries
The pace of growth of emerging economies has led to large rises in the prices of primary resources and foodstuffs. This has been extremely beneficial in terms of revenues for developing economies, but may not encourage economic diversity which may harm them in future years or in an economic downturn
what is mean income
Mean income is total income divided by the population
what is mean household income
Mean household income is total income divided by the number of households
what is median income
Median income is the value of the middle income in the population when it is sorted in ascending order
what is median household income
Median household income is the value of the middle income of all households in the country when they are sorted in ascending order
What is the advantage of using median income
Using median income removes extreme distortions created by rich and poor people in an economy
Therefore it gives a more accurate figure for use by a country’s middle class
