Theme4.2

Question 1

Absolute poverty

Answer 1

Occurs when a person has insufficient resources to meet basic human needs e.g. Food, shelter, clothing

Question 2

Relative poverty

Answer 2

People are classified as relatively poor in a country if their incomes are below those of the average income

Question 3

Lorenz Curve

Answer 3

Is a graphical representation of income distribution

Question 4

Gini coefficient

Answer 4

Is a numerical calculation of inequality based on the Lorenz curve with a value of zero being perfect equality and a value of 1 representing perfect inequality

Question 5

HDI

Answer 5

Human development index, a measure of living standards that takes a number of factors in to considered action including life expectancy, adult literacy rate and infant mortality rate

Question 6

Primary product dependency

Answer 6

Occurs where the value of production of primary products accounts for a large proportion of GDP

Question 7

Harrod-Domar Model

Answer 7

Illustrates the problem of how countries with a low GDP per capita will experience low savings ratios

Question 8

Capital flight

Answer 8

Occurs when assets or money is taken out of a country

Question 9

Property rights

Answer 9

Are the exclusive authority to determine how a resource is used, whether that resource is owned by government, collective bodies or by individuals. In other words, property rights are ownership rights

Question 10

Joint venture

Answer 10

Refers to an enterprise undertaken by two or more firms which retain their distinct identities

Question 11

Buffer stock scheme

Answer 11

Is a scheme designed to reduce price fluctuations and which involves the buying and selling of stocks to maintain price within agreed limits

Question 12

Lewis Model

Answer 12

Considers many developing countries at an early state of development have two sectors, primary and secondary.

Question 13

Marginal productivity

Answer 13

Is the change in output resulting from the addition of one more unit of the variable factor

Question 14

Aid

Answer 14

Refers to the voluntary transfer of resources from one country to another

Question 15

Debt relief

Answer 15

Usually owed to all or some of the following:

The IMF, the World Bank, governments and bank in developed countries

Question 16

Moral hazard problem

Answer 16

Occurs when the person/firm/country taking the risk may not be the one who bears the consequences of that risk

Question 17

IMF

Answer 17

International Monetary Fund - founded in 1944 with the objective of increasing international liquidity and providing sustainability in capital markets through a system of convertible currencies pegged to the dollar