The Changing Economic World

Question 1

Gross National Income (GNI) per head

Answer 1

Average wealth per person in a country including incomes earned by foreign residents;

Limitations: based on average so hides poorest and richest, narrow indicator (focuses on wealth not quality of life)

Question 2

Literacy rate

Answer 2

Percentage of people with basic reading and writing skills;

Limitations: difficult to carry out survey in world population, especially conflict zones or squatter settlements

Question 3

Birth rate

Answer 3

Number of live births per thousand of the population per year;

Limitations: can be affected by population policies (eg, China’s one child policy), figures in LICs not necessarily accurate

Question 4

Death rate

Answer 4

Number of deaths per thousand of the population per year;

Limitations: doesn’t tell us cause of death (eg, natural disaster not poor healthcare), difficult to collect accurate figures from LICs

Question 5

Infant mortality rate

Answer 5

Number of deaths of children under age 5 of one per thousand live births;

Limitations: inaccurate figures when many births go unregistered in LICs, high infant mortality because of social/political factor (eg, China’s is high because of one child policy)

Question 6

Life expectancy

Answer 6

Average age one is expected to live based on year of birth;

Limitations: high infant mortality means those who survive live much longer than the mean life expectancy

Question 7

People per doctor

Answer 7

Number of people who depend on a single doctor;

Limitations: in some NEEs people in rural areas use mobile phones to get healthcare advice and this is not taken into account

Question 8

Access to safe water

Answer 8

Percentage of people with access to healthy clean running water;

Limitations: water quality declines due to flooding or poor maintenance of pipes, rising cost of water forces poor to start using unsafe sources

Question 9

Human Development Index (HDI)

Answer 9

An index scored out of 1 based on LIFE EXPECTANCY, LITERACY RATE, and GNI

Question 10

LICs Economic Development

Answer 10

GNI around US$1,045;

Agriculture largest developing sector in economy

Question 11

NEEs Economic Development

Answer 11

Rapid industrialization;
TNCs invest in NEEs because of weak Trade Unions;
World Bank classifies NEEs as middle-income countries

Question 12

HICs Economic Development

Answer 12

GNI of US$12,736 or above;

Office work overtaken factory employment, creating post industrial economy

Question 13

Demographic Transition Model: Stage 1 (High Stationary)

Answer 13

Very high birth rate + death rate (+ infant mortality);
Population remains low (as well as life expectancy);

Causes: No family planning, no access to modern medical care, death rate fluctuates due to disease outbreaks, poor nutrition + hygiene + sanitation

Question 14

Demographic Transition Model: Stage 2 (Early Expanding)

Answer 14

Brith rate remains high (level), death rate begins to fall, (infant mortality decline);
Population + life expectancy begin to increase because death rate falls;

Causes: Vaccines introduced, no family planning, nutrition + hygiene + sanitation improve

Question 15

Demographic Transition Model: Stage 3 (Late Expanding)

Answer 15

Birth rate begins to fall, death rate begins to level, (infant mortality lowers);
Population almost reached peak, life expectancy increases;

Causes: Family planning introduced, people have better access to contraceptives

Question 16

Demographic Transition Model: Stage 4 (Low Stationary)

Answer 16

Birth rate fluctuates around death rate, death rate levels out, (infant mortality stable);
Peak population, high life expectancy;

Causes: Educated women prefer careers over early marriage, society ages due to high life expectancy and very low birth rate, birth rate fluctuates due to generational values, people have better access to contraceptives

Question 17

Demographic Transition Model: Stage 5 (Declining)

Answer 17

Birth rate below death rate, death rate remains level, (infant mortality lowers slightly);
Population levels out, high life expectancy;

Causes: Modern medical healthcare, women prefer careers, use of contraceptives, society ages more

Question 18

Causes of Uneven Development: Physical

Answer 18

Natural disasters (eg, Port Prince): lack of clean water, rebuilding, electricity shortages;

Lack of clean water (eg, Haiti cholera): cause diseases, after natural disasters;

Climate Change: droughts, rainfall

Question 19

Causes of Uneven Development: Historical

Answer 19

Slavery (eg, Africa): not enough workmen to develop country;

Conflict (eg, Rwanda): money used on weaponry, workers dying;

Corruption (eg, Nicaragua): leaders using money for themselves;

Colonialism (eg, India - UK): countries exploited, cannot sell to highest bidder, can only sell to colonizers

Question 20

Causes of Uneven Development: Economic

Answer 20

Informal Economy: poor cities cannot provide enough jobs —> forced to get informal jobs, not recognized by the government and won’t receive help;

Unfair Trade (eg, Coffee Trade): farmers don’t receive much money, only big companies benefit;

Tax on Imports: to encourage people to buy national/local goods —> Subsidies: cash handouts given to farmers so they can sell at a low price but get on well financially

Question 21

International Aid

Answer 21

1+ government give money, goods or services to an LIC. Does not need to be repaid. Different types of aid: SHOR-TERM (typical after natural disasters), LONG-TERM (sustainable aid which improves resilience), BILATERAL (aid from one country to another), MULTILATERAL (richer governments give money to international organizations, eg, World Banks, which redistribute it to LICs), TIED (money given under agreed condition), and VOLUNTARY (donated money through charities and NGOs into LICs);

Problems: receiving country becomes reliant, donor country may impose conditions that limit development of recipient country, high interest rate and debt may put recipient countries in even more debt, corrupt countries do not spend aid wisely.

Question 22

Debt Relief

Answer 22

High debts may not even allow for development. When LICs owe high amounts of debt, debts are cancelled or interest rates lowered.

Problems: strict conditions can actually limit development (eg, selling natural resources to foreign countries, or to remove subsidies from farmers meaning that farmers cannot compete internationally)

Question 23

Fair Trade

Answer 23

Many producers in LICs often don’t receive much payment as bigger companies benefit more. Producers are payed reasonable prices with fair trade. Part of price is included in local development projects, but farmer must agree to farm eco-friendlily;

Problems: most of the profits go to retailers rather than producers, difficult to monitor work conditions which means employers may not abide by expectations, employees of Fair Trade employers do not necessarily receive better treatment than non-Fair Trade employees

Question 24

Micro-Funding

Answer 24

Small loans that can quicken development, but are easily repaid. Available to businesses and poor locals. Can boost development in local areas. (eg, Farmer receives small loan to buy fertilizers and seeds, then sells to market and part of profits goes back to donor to repay loan). Profit used to invest in education and healthcare;

Problems: only works at a local-scale not national, better-educated communities receive loans so people who are less-educated and less-literate do not benefit, the quality of life of the neediest does not improve

Question 25

Intermediate Technology

Answer 25

Equipment and techniques that are suitable to needs of people. Easy-to-use and equipment that is basic is distributed to areas of LICs. People in LICs do not often have skills to maintain and repair complicated equipment. Most projects involve agriculture, water or health

Question 26

Investment

Answer 26

TNCs place offices in LICs. Builds factories, jobs, lay roads, and build internet cables. Money received from TNCs is called Foreign Direct Investment (FDI). Multiplier effect begins where small businesses benefit and thrive = more jobs;

Problems: conditions can be placed which limit development of recipient country, poor treatment of workers, low wages, harm the environment through disposal of toxic waste, most profits go back to TNC not the locals

Question 27

Primary Sector

Answer 27

Primary industries extract raw materials from ground;

Eg: mines, farmers, fishing, logging

Question 28

Secondary Sector

Answer 28

Where raw materials are manufactured into finished goods;

Eg: car manufacturer, clothes manufacturer, building

Question 29

Tertiary Sector

Answer 29

Service sector providing services to people;

Eg: teacher, shop owner, fireman, doctor

Question 30

Quaternary Sector

Answer 30

Work in knowledge of economy, providing information and developing new ideas;
Eg: medical researcher, graphic designer, fashion designer