globalisation and economic development

Question 1

economic development

Answer 1

structural changes needed for growth to occur in an economy and to sustain increases in living standards.
a qualitative measure of the performance of an economy
measured through HDI

Question 2

HDI

Answer 2

HDI is a scale of 0 to 1 - the higher the number he more economically developed a nation is.
HDI takes into account life expectancy, education levels and GNI per capita

Question 3

distribution of income

Answer 3

comparison of annual incomes which are a direct return from the factors of production

Question 4

distribution of wealth

Answer 4

comparison of asset ownership of citizens

Question 5

Gross National Income

Answer 5

measures the sum of value added by all resident producers in the economy plus primary income from foreign sources, on a purchasing parity basis

Question 6

advanced economies

Answer 6

• high income levels, average per capita income over US 30,000
• slower growth in recent decades
• market based economies with free enterprise economic systems of resource allocation and limited government intervention. services based
  e. g. USA, Australia

Question 7

Emerging Economies

Answer 7

• income levels vary but fast growth in income levels
• strongest growth rate in the world and favourable prospects
• industrialising, manufacturing
  e. g. China, India

Question 8

Developing Economies

Answer 8

• low-income levels, around half of population in absolute poverty
• moderate growth rates but population growth also high
• heavily reliant in agriculture, and (in more extreme cases) foreign aid
  e. g. egypt, cambodia

Question 9

global factors that lead to differences between economies

Answer 9

global trade system
global financial architecture
global technology flows

Question 10

global trade system

Answer 10

developing economies have restricted market access

trade agreements tend to be dominated by advanced economies and exclude developing economies

Question 11

global financial architecture

Answer 11

economic volatility occurs due to advanced economies engaging in short-term financial investment in emerging economies. developing economies tend to have high foreign debt burdens due to high rates of foreign borrowing alongside low incomes

Question 12

global technology flows

Answer 12

advanced economies have access to greater amounts of capital, boosting productivity

Question 13

domestic factors that lead to differences between nations’ economies

Answer 13

economic resources
labour supply and quality
lack of infrastructure and capital formation
low per capita incomes
political instability and corruption
reduced taxation
high levels of foreign debt

Question 14

domestic factors - economic resources

Answer 14

either a lack of natural resources or for countries that rely on natural resource exports, downturns in commodity prices

Question 15

domestic factors - labour supply and quality

Answer 15

high population growth, poor education levels and low health standards reduce the quality of a nation’s labour supply

Question 16

domestic factors - low per capita incomes

Answer 16

reduces the overall spending and investment rates of nations, leading to poverty cycles

Question 17

domestic factors - political instability and corruption

Answer 17

reduce investor confidence

Question 18

domestic factors - reduced taxation

Answer 18

due to low incomes

limits the government’s ability to support economic growth and development

Question 19

effects of globalisation

Answer 19

increased opportunities for economies of scale, specialisation and taking advantage of lower input costs
increased technological innovation due to increased competition internationally which has stimulated productivity levels
may lead to financial contagion where financial crises can be transmitted quickly
increased income inequality and migration of skilled labour away from developing economies to advanced
increased negative externalities such as environmental degradation and exploitation of the labour forces of developing nations