Unit 7 Terms Flashcards
Small Scale Finance
Finance that deals with small businesses and low income individuals who usually aren’t included in the traditional banking systems
Industrialization
The process by which economies transform from primarily agrarian societies to ones based on the manufacturing of good and services
Natural Resources
Materials and components that can be found within the environment, which are utilized by humans
Class Structures
The hierarchical organization of society based on factors like wealth, power, and social status
Raw Materials
Unprocessed substances that are extracted or harvested from the earth
Colonialism
The practice where a country establishes control over foreign territories
Economic Sectors
Distinct categories of economic activity that classify the various types of production and services in an economy
Primary sector
Involves extracting and harvesting natural resources
Tertiary sector
Provides services rather than goods
Quaternary Sector
Involves knowledge based services (research)
Quinary Sector
High level decision making and specialized services
Break-of-Bulk Point
A location where goods are transferred from one mode of transportation to another
Informal Economy
Economic activities that aren’t regulated by the government
Least Cost Theory
An economic principle that explains the optimal location of manufacturing industries based on minimizing transportation, labor, and agglomeration costs
Core
Regions/Countries that dominate trade, control, the most advanced tech, and have the highest productivity and wealth
Semi-Periphery
Regions that aren’t as economically developed as core nations but are more developed than peripheral countries
Periphery
Regions that are often economically and politically disadvantaged compared to the core
Gross Domestic Product (GDP)
The total value of all goods and services produced by a country’s economy
Gross National Product (GNP)
The total value of all goods and services produced by a country’s economy
Gross National Income (GNI)
Total income earned by a nation’s residents and businesses, including any income earned abroad, over a specific period, usually a year
Formal Economy
Legal and regulated parts of an economy with established rules, laws, and regulations
Income Distribution
How income is divided among different groups or individuals
Gender Inequality Index (GII)
A composite measure that reflects inequalities in gender based outcomes across 3 key dimensions: reproductive health, empowerment, and market participation
Indices of Empowerment
Measures used to assess the ability of individuals (often women) to make choices and control their lives, particularly in economic and political spheres
Labor-Market Participation
The percentage of the working age population that is either employed or actively seeking employment
Human Development Index (HDI)
A composite statistic used to measure and rank countries based on their levels of human development
Microleans
Small loans given to individuals, especially those in developing countries, who lack access to traditional banking systems
Standard of Living
The level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area
Rostow’s Stages of Economic Growth
1) Traditional Society
2) Preconditions to take off
3) Take off
4) Drive to maturity
5) Age of high mass consumption
Wallerstein’s World Shstems Theory
A socioeconomic framework that categorizes countries into core, semi periphery, and periphery based on their economic activities and global power dynamics
Dependency Theory
The political and economic relationships between countries and regions of the world control and limit the economic development possibilities of poorer areas
Commodity Dependence
The economic condition where a country relies heavily on the export of one or a few primary commodities for its income
Complementary Advantage
2 or more countries benefit from trade
Comparative Advantage
How countries or individuals can benefit from specializing in the production of goods or services for which they have lower opportunity cost compared to others
Free Trade
An economic policy that allows goods and services to be traded across borders with little to no government interference, such as tariffs or quotas
World Trade Organization (WTO)
Facilitates international trade by providing a structured framework for negotiating trade agreements and reducing trade barriers
Organization of the Petroleum Exporting Countries (OPEC)
An intergovernmental organization founded in 1960, consisting of major oil-exporting countries that coordinate and unify petroleum policies among member countries
European Union (EU)
A political and economic union of 27 European countries that have chosen to cooperate closely in various areas, including trade, governance, and social policy
Mercosur (Southern Common Market)
A group of South American countries that work together to trade more easily with each other.
Tariffs
Taxes imposed by a government on imported goods, which raise the price of these goods in order to protect domestic industries and generate revenue
International Monetary Fund (IMF)
A global organization that gives money to countries that are having money problems, to help their economies get better.
Economies of Scale
The reduction in the per unit cost of production as the volume of production increases
Agglomeration
The clustering of businesses or industries in a specific area, leading to benefits like shared infrastructure, labor pools, and cost reductions due to proximity
Service Sectors (Tertiary Sector)
Encompass activities that provide service to people rather than producing goods
Growth Poles
A specific area or sector that drives economic development in a region
Natural Resource Depletion
The consumption of a resource faster than it can be replenished, leading to a reduction in its availability
Mass Consumption
The widespread purchase and consumption of goods and services by a large population
Ecotourism
A form of tourism focused on experiencing nature responsibly, aiming to conserve the environment, support local communities and educate visitors about conservation efforts
Multiplier Effect
The multiplier effect is when one job or investment creates more jobs or economic activity in an area.
Fordism
The industrial production system, pioneered by Henry Ford, characterized by mass production, assembly line, standardized parts, and a focus on efficiency and low costs
Post-Fordist Methods of Production
A shift away form Fordism, characterized by mass production, toward more flexible, specialized, and often globalized production systems
