Growing economies Flashcards
Characteristics of developed, developing an emerging economies
Developed economies:
High income levels
High literacy rate
High life expectancy
Good infrastructure
Highly industrialised- tend to rely more on tertiary sector than on secondary
Low levels of unemployment- laws to protect employees/ avoid exploitation/ clean safe environment
Developing economies:
Low income levels
Low literacy rate- lack of educational resources
Low life expectancy
Poor infrastructure- lack of roads, railways, networks, schools, factories, hospitals etc..
Reliance on primary sector- mostly rely of primary sector for exports, income and employment
High unemployment- few job opportunities
High population growth
Emerging economies:
Rapid economic growth- increase in country’s productive capacity
Investors like emerging markets as they are likely to grow quicker than more mature markets/ can increase profits and dividends.
Increase in average income- allows consumers to spend more on both imports and domestic goods and services/ encourages growth of domestic firms/ giving them more domestic power and allowing them to compete internationally.
Falling unemployment rates- jobs are being created
Growing economic power of countries within Asia, Africa and other parts of the world
Most BRICS (Brazil, Russia, India, China and South Africa) and MINT (Mexico, Indonesia, Nigeria and Turkey) have experienced strong wealth over the past few years This growth is increasing the overall economic power of many countries in Asia, Africa and other parts of the world.
Implications of economic growth for individuals and businesses
High economic growth leads to increased profitability for firms, enabling more spending on research and development.This can lead to technological breakthroughs, such as improved medicine and greener technology
Economic growth means a rise in disposable income/ increases the overall demand of goods and services.
Demand is likely to become income elastic- increased revenue/ profit
These goods and services can be produced domestically or imported from abroad, creating many opportunities for trade.
Individuals will benefit from increased international trade as they will be able to buy cheaper goods from overseas where production costs are lower.
It also offers more variety in quality, design and product ranges, which helps to increase standard of living.
Employment patterns:
Firms would want information on unemployment rates, trends, labour costs, productivity and qualifications of individuals before entering an economy.
High level of unemployment means low rates of disposable income- no good in exporting to that country, however people may be looking for jobs so they can find labour there/ invest in building factories
Also consider future employment trends- more machinery means less workers are needed
Indicators of growth
Gross domestic product (GDP) per capita:
Measure of economic activity/ all the goods and services produced in a year divided by the number of people in the country.
Con: data may not always be consistent, comparable or easy to verify
Human Development index (HDI):
Combines statistics on life expectancy, education and income for any particular country into a single rankable value.
Life expectancy- important indicator of the health/ quality of healthcare and social systems of a country
Mean year of schooling- helps to assess the average amount of education a 25-year old person might have. But doesn’t consider its nature and quality
