Unit 5- Economic Development- done Flashcards
What are the factors affecting birth rate? Provide definition
Birth rate is the average number of children born per year compared to the total population. Factors affecting it- marriage, contraception methods, custom and religion, changes in female employment, living standards
What are the factors affecting life expectancy? Provide definition
Life expectancy is how many people die per year, compared to every 1000 people. Factors affecting it- living standards, age distribution, medical advancements, natural disasters and wars.
What is migration- and what are the two components to it.
Measures the difference between immigration and emigration to a from a country. Immigration-> Movement of people to a country. Emigration-> Movement of people from a country.
What is the dependent population and how can we calculate dependency ratio?
The dependent population is the population that depends on the labor force to produce the goods and services it needs and wants.
What are the characteristics used to measure population growth?
- age distribution
- sex distribution
- geographic distribution
- occupational distribution
What is GDP and how can we measure it?
GDP is the total production of goods and services by foreign and national factors of production at market prices. We can measure it by: Production, Income and Expenditure
What is Real GDP and Nominal GDP. What is Real GDP per capita.
Real GDP is the value of all the goods and services produced in an economy in a 1 year period- adjusted for inflation
Nominal GDP is the actual value of all the goods and services produced in an economy in a 1 year period- not adjusted for inflation. Mean wealth of each citizen in a country.
What is HDI and how is it measured?
Human development index- measures how development has improved living standards. Measured by:
Health-> Birth rate and death rate
Education-> no. of school years expected to study for
Living Standards-> GDP
0.5-0.7-> medium development 0.7-0.79-> high development
How do we measure HDI and GDP?
- Education
- Healthcare Facilities
- Population growth
- Production capacity(Factor productivity)
- Infrastructure
- Income of Individual
- Saving and Investment
What are the disadvantges ofGDP
1) Single Indicator-> provides limited information
2) Average-> Maybe there is significant poverty in other parts of country
3) Doesn’t take formulation of funds and allocation of resources into account
4) Income disparity not included.
What are the advantages and disadvantages of HDI
Advantages: Country’s stance, allocation of funds, increases infrastrucutre, wide use.
Disadvatnages: Doesn’t include: Gender equality and others, access to clean water and sanitation, employment, income disparity
What are the three main reasons for differences in income and living standard
- population
- allocation of resources and funds in a sector
- availability of choices.
What is poverty
Poverty is a situation where a person lacks the financial resources to sustain a basic living standard.
What is Absolute Poverty and relative porverty?
Absolute Poverty- A condition where a household is below a necessary level to maintain a basic living standard
Relative Poverty- A certain percentage below the median income in a country
What are the causes of POverty
1) lack of education-> lack of skill- less wages- less disposable income
2) lack of wage-> low production- migration increases
3) Unemployment-> lack of wages- can’t maintain basic living standards
4) Age-> Older people- production capacity decreases
5) Illness-> less working days- less production
6 and 7) Natural disaster and wars and conflicts-> more money towards infrastructure
How can we alleviate poverty?
Promoting Economic Growth- increase more jobs
Improve education- higher skills
National minimum wage
State benefits- govt provides more subsdies
Progressive taxation- free education and healthcare
How can we alleviate poverty?
Promoting Economic Growth- increase infrastructure
Improve education- free access to education
National minimum wage
State benefits- reduce unemployment
Progressive taxation- decrease taxes put on income
How does Birth rate impact GDP and HDI?
Advantages:- higher working population, affordability increases, govt revenue can be used to alleviate poverty
Disadvantages:- in future more dependent population, harder to allocate resources
What are the causes of differences in development and their influences
1) differences in income- high gdp per capita-> more developed-> inequality of distribution income in high GDP/capita
2) differences in productivity- differences in skill-> higher productivity-> higher wages
3) differences in income- level of skill (directly influenced) -> more productivity -> higher wages
4) Differences in healthcare - impacts productivity -> output and income influenced- developed: healthy, undeveloped: unhealthy
5) Differences in population growth - countries that are densely populated have higher challenges. more populated country- more tax revenue. Less govt spending per capita shows how a country is poorer
6) Differences in economic size sectors - larger proportion of secondary and tertiary sector tend to be more developed due to wages. Primary is less. Secondary is higher and tertiary is highest.
7) Differences in saving and investment - higher savings results higher investments and economic growth.
increased savings ->increased investments -> higher capital stock and higher gdp. If dependency ratio is high less, money for saving and investment.
What’s optimum population?
Something that will allow a country to maximize output per head of a population from its existing population.
Why does age factor play an important role in achieving optimum population?
Independent population: can work for more no. of years
Net migration: age distribution
Dependent population: Output is low
How does gender balance use birth rate to achieve optimum population
If male was more than female: Reduced birth rate
If female was more than male: Reduced birth rate- lower GDP- maternity leave- decreases productivity.
What are the two characteristics of optimum population?
1) Minimum unemployment rate: education opportunities- more job opportunities- more production- more creation of jobs- gdp increases.
2) More earning population: higher disposable income- affordability increases - consumption increases- gdp increases
