Growing economies

Question 1

What is an emerging economy?

Answer 1

Any economy in the process of rapid growth and industrialisation

Question 2

Key features of emerging economies

Answer 2

• making a transition
• process of rapid industrialisation (i.e development of secondary and tertiary sectors)
• many inhabitants stallion poverty
• domestic businesses still struggle to access global markets

Question 3

What are the BRICs?

Answer 3

Brazil, Russia, India, China
Four major emerging national economies
These countries stand out mainly due to their sheer size and growth potential

Question 4

Why do emerging economies experience faster economic growth compared to developed countries?

Answer 4

• urbanisation process continues
• industrialisation
• population growth
• per capita income growth, rise of middle classes and consumer society
• workforce will continue to improve skills and be more productive
• technological innovation

Question 5

Business opportunities of emerging economies

Answer 5

• growing numbers educated middle-class consumers = growing consumer spending
• cultural shifts- e.g higher demand for personal products, private education and healthcare
• demand for infrastructure and other products and services from developed economies
• source of high skilled but low cost labour

Question 6

Business threats from emerging economies

Answer 6

• increasingly large pool of skilled, but low cost labour
• undervalued currencies make their exports cheaper
• inadequate protection of brand and other intellectual property
• state subsidy of industries to make them more competitive globally

Question 7

Expansion into emerging markets poses greater risks for businesses located in developed economies such as the UK, key risks include:

Answer 7

• political instability
• cultural differences
• corruption and bureaucracy
• low cost production makes developed economies uncompetitive in some markets

Question 8

Measures of economic growth and development: HDI

Answer 8

(Human development Index)

• focuses on: life expectancy, education, income
• tracks progress made by countries in improving these three basic development outcomes
• the higher the value, the better

Question 9

Limitations of HDI

Answer 9

• doesn’t take into account qualitative factors, such as cultural identity and political freedoms
• takes no account of income distribution
• if income is unevenly distributed, GDP per capita will be an inaccurate measure of peoples monetary well being

Question 10

What is GDP per capita?

Answer 10

GDP per capita measures the value of GDP per person in a country

Question 11

What are the MINTs?

Answer 11

Mexico, Indonesia, Nigeria, Turkey

- new emerging countries

Question 12

Why is healthcare a measurement of growth?

Answer 12

• as economy grows, investment in welfare state

- WHO compares health against the average life expectancy of 71 years

Question 13

Whys is literacy a measure of growth?

Answer 13

• as economy grows, investment in education/ training/ skills transfer- increases literacy
• more demand for higher skilled labour