Macro 2.2 Economic development

Question 1

Economic development

Answer 1

Rise in people’s economic well-being and quality of life

Question 2

Sustainable development

Answer 2

Economic development that meets the needs of the present without compromising the ability of future generations to meet their own needs

Question 3

GNI per capita

Answer 3

Dollar value of a country’s final income in a year, divided by its population

Question 4

Human Development Index (HDI)

Answer 4

Composite indicator of economic development made up of three parts: GNI per capita, life expectancy at birth, and mean and expected years of schooling. HDI values raneg from 0 to 1

Question 5

Primary sector

Answer 5

Any industry that is involved in the production or extraction of raw materials, such as farming, logging, fishing and mining

Question 6

Secondary sector

Answer 6

Any industry that involved in processing the raw materials of the primary sector to create end-products, e.g.. manufacturing, construction, assembly

Question 7

Tertiary sector

Answer 7

Production that includes the provision of services, not end-products, e.g.. commerce, real estate, finance, administration, education.

Question 8

Short term economic growth

Answer 8

Shift in AD along SRAS

Question 9

Name two government policies which could cause short term economic growth.

Answer 9

Reduced direct taxation, reduced interest rates.

Question 10

Two advantages of short term economic growth

Answer 10

fall in unemployment, improved government budget; increased confidence; increased output and investment.

Question 11

Two disadvantages of short term economic growth

Answer 11

Uk less competitive; increased government borrowing; consumer debt; inflationary pressures.

Question 12

Recession

Answer 12

Two quarters where there is negative economic growth (falls in the value of real GDP)

Question 13

BOOM

Answer 13

where there is above trend growth in real GDP

Question 14

Capital utilisation

Answer 14

Where all productive resources are being used.

Question 15

Downturn

Answer 15

When an economy moves from a boom period into a recession. Often accompanised by falling confidence.

Question 16

GNI

Answer 16

Gross National Income- measure of the output of an economy (GDP) plus flows of income from abroad. Used by the IMF, World Bank and UN.

Question 17

Kuznets curve

Answer 17

Curve which shows the relationship between economic inequality and GDP per capita. Shows that as GDP increases, at first inequality rises and then falls.

Question 18

Lorenz Curve

Answer 18

Shows the distribution of income across the different income levels of a population showing whether there is equality or inequality in the distribution.

Question 19

Environmental Kuznets curve

Answer 19

Diagram which shows the relationship betwen environmental quality and changing GDP. As GDP increases, the environmental quality falls before it rises.