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Economic Development > Exam 1 > Flashcards

Exam 1 Flashcards

1
Q

First World

A

market-oriented

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2
Q

Second World

A

centralized economies

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3
Q

Third World

A

rest of the world

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4
Q

Emerging markets

A

major developing countries where financial
instruments are traded/multinational companies operate

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5
Q

Transition economies -

A

Move from Communist to Capitalist

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6
Q

LDCs and DCs

A

Less developed countries and Developed Countries

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7
Q

Sub-Saharan Africa (SSA)

A

Countries south of the Sahara

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8
Q

East Asia

A

Japan, North and South Korea, China, Mongolia, and Taiwan. (With or Without China)

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9
Q

Middle East and North Africa (MENA)

A

Algeria, Bahrain, Djibouti, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Malta, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, the United Arab Emirates, Palestine, and Yemen.

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10
Q

South Asia

A

Bangladesh, Bhutan, India, Pakistan, Nepal, Sri Lanka, and Maldives

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11
Q

Central Asia

A

Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan

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12
Q

OECD

A

Organization of Economic Cooperation and Development, DCs

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13
Q

G7

A

7 Most advanced developed economies: Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States

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14
Q

G8

A

G7+ Russia

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15
Q

G8+5

A

G8+ Brazil, India, China, South Africa, and Mexico

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16
Q

Oil Producing Countries

A

Oil Producing Arab States+ OPEC countries

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17
Q

Large Countries

A

India and China

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18
Q

Island Economies

A

Madagascar

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19
Q

Transition Economies Examples

A

Vietnam, Poland, and Cuba

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20
Q

NICS

A

Newly Industrialized Countries

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21
Q

Gang of Four (Four Asian Tigers)

A

South Korea, Taiwan, Hong Kong, and Singapore

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22
Q

Tiger Clubs: follow tigers soon

A

Phillippines, Malaysia, Vietnam, Indonesia, and Thailand

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23
Q

BRICs

A

Brazil, Russia, India, and China

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24
Q

BRICS

A

Brazil, Russia, India, China, and South Africa

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25
Q

MINT

A

Mexico, Indonesia, Nigeria, and Turkey

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26
Q

Next 11

A

Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan,
Philippines, South Korea, Turkey, Vietnam

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27
Q

Define Growth

A

sustained growth in per capita income

28
Q

Development

A

no formal definition, more of a process with multiple features

29
Q

High Growth but not much development

A

Gulf Oil Producing States (e.g. Libya, Qatar)

30
Q

High Development but not much Growth

A

Sri Lanka, Cuba

31
Q

Market Failure

A

the economic situation defined by an inefficient distribution of goods and services in the free market

32
Q

Government Failures

A

arises when government has created inefficiencies because it should not have intervened in the first place or when it could have solved a given problem or set of problems more efficiently, that is, by generating greater net benefits.

33
Q

Reasons for market failure

A

Information, Monopolies, Externalities, and Public goods

34
Q

First World

A

Market Based Economies

35
Q

Second World

A

Command Based: USSR

36
Q

Third World

A

Everybody else in the world

37
Q

The World Bank

A

Determines the GDP per capita in order to become a DC/LDC
DC: 12,535 and above
DC 12,534 and below

38
Q

Economic Development

A

No real definition of Development

39
Q

GDP

A

Gross Domestic Product
The production of Everything within the nations borders

40
Q

GNP

A

Gross National Product Includes the production of all citizens of that country whether they live in it or not

41
Q

GNI

A

Gross National Income
a measurement of a country’s income. It
measures all the income earned by a country’s residents and businesses,
including those earned abroad that flow back into the country
Used and preferred by the world banks

42
Q

Doubling Time

A

number of years it takes for income to double in a
country (Rule of 70)

43
Q

Doubling Time Formula

A

70/g
g=growth rate

44
Q

PPP

A

purchasing power parity; more effective than ER because it
takes into account non-traded goods and can be used to compare
their value however it does not do a good job in comparing QUALITY

45
Q

LDCs GNI rises with the ___ Computation

A

PPP

46
Q

Non-traded goods

A

ttempts to supply non-tradable goods or
services from a distance is either impossible or results in a significant
loss of utility
Example: Haircuts

47
Q

Historical Growth

A

No growth up until about 1820

48
Q

Leaders in growth from 1580-1820

A

Netherlands

49
Q

Leaders in Growth from 1820-1890

A

UK

50
Q

Leaders in growth from 1890-present

A

USA

51
Q

The Great Divergence

A

shift in which the Western world (i.e. Western Europe and the parts of the New World where its people became the dominant populations) overcame pre-modern growth constraints and emerged during the 19th century as the most powerful and wealthy world

52
Q

Western Offshoots

A

U.S., Canada, Aus- tralia, and Nea Zealand

53
Q

GNI indicates ______

A

Growth

54
Q

HDI indicates ___________

A

Development

55
Q

HDI:
Health

A

Life expectancy (years)

56
Q

HDI:
Education

A

Expected Years of schooling and Mean years of schooling

57
Q

HDI:
Quality of Life

A

ln(GNI@ppp) captures diminishing marginal utility

58
Q

Dimension Index formula

A

DI=Actual Value-Minimum Value/
Maximum value-minimum Value

59
Q

MDGs

A

Millennium Development Goals

60
Q

MDGs purpose

A

More realistic (met most goals)
- More focused (less goals set

61
Q

SDGs

A

Sustainable Development Goals

62
Q

SDGs Purpose

A

Less equitable (unreasonable expectations for LDCs)
- Less involvement (countries have less say in goals set)
- Less obvious goals (poor measurement standards)

63
Q

If Brazil’s growth rate is 5% and GNI per capita (PPP) is $5,750,
what will Brazil’s GNI @ PPP be in 5 years (2020)?

A

A. $7560
B. $8550
C. $6450
D. 7340 (Correct)

64
Q

China wants to double its per capita GDP in 10 years.
What should its per capita income growth be?

A

Formula
70/g = number of years
70/g = 10
G = 7

65
Q

New Zealand has a mean years of schooling of 11.4 and an expected years of
schooling of 13.7. Calculate New Zealand’s education index. (Remember that
the goal posts for the mean is [0:15], and the expected years is [0:18]

A

Find mean years ratio: 11.4/15 = 0.76
Find expected year ratio: 13.7/18 = 0.761
Education index = (Expected + Mean)/2
= (0.76 + 0.761)/2
Education index = 0.76

66
Q
A

Economic Development (2 decks)

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