Unit 4 Development Economics

Question 1

absolute poverty

Answer 1

inability of a family or individual to afford a basic standard of goods and services because their income is below the “poverty line”

Question 2

bilateral aid

Answer 2

refers to foreign aid that is offered by an individual country to another country

Question 3

common access resources

Answer 3

resources which have properties similar to public goods in that it is very difficult or impossible to prevent people from using or consuming the resource

Question 4

corporate social responsibility

Answer 4

approach taken by firms where they attempt to produce responsibly or ethically towards the community and environment, demonstrating a positive impact on society

Question 5

corruption

Answer 5

abuse of public office for private gain

Question 6

debt cancellation

Answer 6

act of eliminating the debt owed by y developing country government in order to allow it to achieve development objectives

Question 7

development indicators

Answer 7

statistics that may be used to assess the level of development of an economy, e.g. HDI, infant mortality rate

Question 8

diversification

Answer 8

strategy to reduce reliance on the export of a narrow range of exports by re-allocating resources to a wider range of industries

Question 9

dual-sector model

Answer 9

model that assumes that an economy has two sectors: an economically advanced urban industrial sector and a traditional low productivity rural sector

Question 10

economic development

Answer 10

multidimensional concept involving improvement in standards of lining, reduction in poverty, improved health and education along with increased freedom and economic choice

Question 11

economic growth

Answer 11

increase in the actual level of output of goods and services produced by an economy, e.g. an increase in real GDP over time

Question 12

export-led growth

Answer 12

refers to a growth and trade strategy where a country attempts to achieve economic growth by expanding its exports

Question 13

export promotion

Answer 13

strategies to encourage economic growth through increased international trade and the promotion of export industries

Question 14

factor endowment

Answer 14

factors of production that a country has available to produce goods and services

Question 15

fair trade organizations

Answer 15

organizations in developed countries that have established a trading system promoting equitable and fair trading relationships between poor producers in developing countries and consumers in developed countries

Question 16

foreign aid

Answer 16

consists of financial flows from a developed world to less developed countries, and includes loans and grants

Question 17

foreign debt

Answer 17

total debt owed by the government of one country to foreign lenders

Question 18

foreign direct investment FDI

Answer 18

long-term investment by a multinational company in a foreign country

Question 19

grants

Answer 19

type of foreign aid consisting of funds that are in effect gifts (they do not have to be repaid)

Question 20

import substitution

Answer 20

strategies to encourage the domestic production of goods in order to reduce imports and stimulate local producers

Question 21

indebtedness

Answer 21

level of external debt or foreign debt of a country

Question 22

infant industry

Answer 22

new domestic industry that has not had the time to establish itself and achieve efficiencies in production, and may therefore be unable to compete with other firms from abroad

Question 23

inward orientation

Answer 23

orientation of an economy in which efforts are made to limit imports of goods and services through protectionist policies and to achieve self-sufficiency in production

Question 24

micro-credit

Answer 24

loans of small amounts that given to people who use the loans to start up small-scale businesses

Question 25

Millennium Development Goals

Answer 25

8 goals adopted by international leaders in 2000, to be achieved by 2015, including goals and targets on income poverty, hunger, maternal and child mortality, disease, inadequate shelter, gender inequality, environmental degradation and the Global Partnership for Development

Question 26

multilaterial aid

Answer 26

foreign aid that is offered by an international organization

Question 27

multinational corporations MNCs

Answer 27

companies based in one country that set up production units, e.g. factories, farms, mines or retail outlets, in other countries

Question 28

non-government organizations NGOs

Answer 28

organizations that are not associated with a government that exist to promote economic development and/or humanitarian ideals and/or sustainable development

Question 29

official aid

Answer 29

foreign aid that is offered by countries or by international organizations

Question 30

official development assistance ODA

Answer 30

aid that is provided to a country by another government or an official government agency. It may be multilateral or bilateral in nature

Question 31

outward orientation

Answer 31

orientation of an economy in which efforts are made to seek integration of the economy with the world market through the expansion of exports

Question 32

poverty

Answer 32

inability of a family or individual to afford a adequate standard of goods and services; this standard may be absolute or relative

Question 33

poverty cycle or poverty trap

Answer 33

any circular chain starting and ending in poverty, meaning that poverty perpetuates itself

Question 34

primary sector

Answer 34

part of an economy that is dominated by agriculture, and also including fishing, forestry and mining

Question 35

relative poverty

Answer 35

inability of a family or individual to afford an adequate standard of goods and services because their income is below a particular percentage of a country

Question 36

secondary sector

Answer 36

part of an economy that includes manufacturing

Question 37

soft loans

Answer 37

loans that are offered as part of foreign aid at lower interest rates and with longer repayment periods

Question 38

structural change model

Answer 38

model that refers to the change in the structure of an economy from a predominantly rural, agricultural economy to a modern, industrial one

Question 39

sustainable development

Answer 39

development which meets the need of the present without compromising the ability of future generations to meet their own needs

Question 40

tertiary sector

Answer 40

part of an economy that includes commerce, finance, transport and all other services like education, health care

Question 41

tied aid

Answer 41

grants or loans that are given to a country, but only on the condition that the funds are used to buy goods and services from the donor country

Question 42

adult literacy rate

Answer 42

proportion of the population aged 15 and over which is able to read and write

Question 43

Gender-empowerment measure GEM

Answer 43

composite index that brings together three variables: share of women‘s seats in parliaments, share of women‘s positions in leadership and management, share of income earned by women

Question 44

Gender-related development index GDI

Answer 44

composite index that looks at the HDI-variables and at the inequalities in these indicators for men and women

Question 45

Genuine progress indicator GPI

Answer 45

measures whether a country’s growth (increase in GDP) has actually resulted in the improvement of the welfare of the people in the country

Question 46

Gross domestic product (GDP) per capita

Answer 46

total value of all final goods and services produced in an economy in one year per head of population

Question 47

Gross national income (GNI) per capita

Answer 47

total income earned by a country‘s factors of production per head of population

Question 48

Human development index HDI

Answer 48

measure that combines: life expectancy at birth, mean years of schooling, expected years of schooling, GNI per capita

Question 49

Human poverty index HPI

Answer 49

combines: % of people who don‘t reach the age of 40, % of adults who can‘t read nor write, % of people without access to safe water, % of children who are underweight

Question 50

infant mortality rate

Answer 50

total number of deaths of children under the age of 1 year per 1,000 live births in a given year

Question 51

life expectancy at birth

Answer 51

average number of years that a person can be expected to live

Question 52

net enrolment ratio in primary education

Answer 52

ratio of the number of children of primary school age who are enrolled in primary school to the total number of children of primary school age