Quiz 1 Flashcards
Gross Domestic Product (GDP)
market value of all final goods and services produced within a country in a given period of time
Purchasing Power Parity (PPP)
the exchange rate at which the currency of one nation must be converted into the currency of another so that the same products and services can be consumed in each country
Sen’s definition of development
the process of expanding freedoms
5 kinds of freedom
political
eco facilities
social opportunities
transparency
protective security
Commodities
goods and services
Functionings
what a person can do with the commodities (one good can have different value for different people)
Capabilities
ways to convert commodities into functionings
Human Development Index (HDI)
longevity
education
real per capita PPP GDP
Poverty
households with income below poverty line ($1.9 PPP)
Ways to measure development
Poverty
Infant Mortality Rate
Secondary School Enrollment
Urbanization Rate
3 explanations to inequality
Geography (climate, guns germs and steel, disease)
Culture
Institutions
Institutions
the humanely devised constraints that shape human interaction, the rules of the game
2 functions of institutions
Facilitating cooperation between private actors, gains from trade
restraining powerful actors, especially predatory goverments
Nash equilibrium
when all players are better off in game theory
solutions to dishonnesty
legal
repetition
reputation
