KEY WORDS & THEORIES

Question 1

What is the first stage of Rostow’s model of development?

Answer 1

Traditional society - This is an agricultural economy of mainly subsistence farming, little of which is traded. The size of the capital stock is limited and of low quality resulting in very low labour productivity and little surplus output left to sell in domestic and overseas markets

Question 2

What is the second stage?

Answer 2

Pre-conditions for take-off - Agriculture becomes more mechanised and more output is traded. Savings and investment grow although they are still a small percentage of national income (GDP). Some external funding is required - for example in the form of overseas aid or perhaps remittance incomes from migrant workers living overseas

Question 3

Third stage?

Answer 3

Take-off. Manufacturing industry assumes greater importance, although the number of industries remains small. Political and social institutions start to develop - external finance may still be required. Savings and investment grow, perhaps to 15% of GDP. Agriculture assumes lesser importance in relative terms although the majority of people may remain employed in the farming sector. There is often a dual economy apparent with rising productivity and wealth in manufacturing and other industries contrasted with stubbornly low productivity and real incomes in rural agriculture.

Question 4

4th stage?

Answer 4

Drive to maturity. Industry becomes more diverse. Growth should spread to different parts of the country as the state of technology improves - the economy moves from being dependent on factor inputs for growth towards making better use of innovation to bring about increases in real per capita incomes

Question 5

5th stage?

Answer 5

Age of mass consumption. Output levels grow, enabling increased consumer expenditure. There is a shift towards tertiary sector activity and the growth is sustained by the expansion of a middle class of consumers.

Question 6

What is Emergency Aid?

Answer 6

Money, foods, goods and services given at times of dire need

Question 7

What is Food Aid

Answer 7

Edible commodities donate to needy populations

Question 8

What is Multilateral Aid?

Answer 8

Aid that is given by a number of countries and organisations, like the United Nations and the World Health Organisation

Question 9

What is Tied Aid?

Answer 9

Foreign Aid that must be used in the donor country to buy goods and service from the country giving the aid

Question 10

What is sustainable development?

Answer 10

Development that meets the needs of the people today without harming the ability of future generations to meet their own needs

Question 11

What is an NGO?

Answer 11

An independent charitable organisation that provides aid

Question 12

What is Bilateral Aid?

Answer 12

Aid from one country to another

Question 13

What is Voluntary Aid?

Answer 13

Money collected from the public (and sometimes governments) by non-governmental organisations

Question 14

What is Short-term Aid?

Answer 14

Aid that provides support for a short time, sometimes when there is an immediate need

Question 15

What is Top-Down Development?

Answer 15

Development projects that are imposed on people from ‘above’

Question 16

What is Long-term Aid?

Answer 16

Aid that provides support over a long period of time to make changes that last

Question 17

What is Bottom-up development?

Answer 17

Development projects that start and work from the ‘grass roots’ level

Question 18

What is the Clark-Fisher Model?

Answer 18

Shows that as an economy advances the proportion of people employed in each sector changes

Question 19

What is the primary industry in the Clark-Fisher model?

Answer 19

Primary industry is the extraction of raw materials from the ground or the sea. It includes farming, fishing, forestry and mining.

Question 20

What is the secondary industry in the Clark-Fisher model?

Answer 20

Secondary industry is the manufacturing of goods using the raw material from primary industry (e.g. a TV or a car) or construction (e.g. a house, a road or new airport)

Question 21

What is the Tertiary industry in the Clark-Fisher model?

Answer 21

Tertiary industry does not produce anything, but involves the provision of different services to people and to other industries, e.g. schools and hospitals.

Question 22

What is Quaternary industry in the Clark Fisher model?

Answer 22

Quaternary industry: New sector mainly found in HICs (high income countries) which is concerned with information and communication technology (ICT) and research and development (R&D).

Question 23

What is the pre-industrial phase in the Clark-fisher model?

Answer 23

The pre-industrial phase– the primary sector leads the economy and may employ more than two-thirds of the working population. Agriculture is the most important activity.

Question 24

What is the industrial phase in the Clark-Fisher model?

Answer 24

The industrial phase– the secondary and tertiary sectors increase in importance. The primary sector declines.

Question 25

What is the post industrial phase in the Clark-Fisher model?

Answer 25

The post-industrial phase– As the tertiary sector becomes the most important sector, the secondary sector declines and the primary sector employs a small percentage of the active population.

Question 26

Definition of cumulative causation

Answer 26

Unfolding of events connected with a change in the economy. These changes apply to a whole set of variables as a consequence of the multiplier effect. Thus, the location of a new factory may be the basis of more investment, more jobs both in that factory and in ancillary and service industries in the area, and have a better infrastructure which would, in turn, attract more industry