Download Economic Development Unit 6

Economic Development
Unit 6
What is Economic Geography?
• Study of how people provide for themselves, flow
of _________________, and patterns of economic
development & _______________.
• ______________________is a leading component
in development today
• Service-Based Economies:
What does development mean?
• ____________________: process of
improvement in the material conditions of
people through diffusion of
knowledge/technology
Continue…
• LDC’s challenge is to find _____________
to the global economy by taking advantage
of ______________________ in skills and
resources
What is globalization?
• _________________________: actions or
processes that involve the entire world and
result in making something worldwide in
scope
What determines development?
• Level of development can be created by:
1)
2)
3)
What is HDI?
• Human Development Index (HDI):
-
What is the economic factor?
• The economic factor is a state’s GDP per
capita
• Gross Domestic Product (GDP):
Continue…
• Average GDP top five states (not per capita)
What are the social/demographic
factors in HDI measurement?
Facts Continued about HDI…
• Highest HDI possible is 1.0 or 100%
• Highest ranking HDI states are mostly in
the Nordic Nations of Europe, the lowest
being in Sub-Saharan Africa
• Highest HDI state is Norway .943 (2011)
• The US is 4th with 0.910 (2011)
• One of the lowest is…..(extra credit opportunity)
What is the PQLI?
• The Physical Quality of Life Index (PQLI):
-Created by Overseas Development Council
-Looks at three factors: infant mortality, life
expectancy and literacy
-Three are averaged after being scored on a 0100 scale with 0 being the poorest/worst
What are some economic indicators
to distinguish MDCs from LDCs?
•
•
•
•
•
1) GDP per capita
2) Economic structure
3) Worker productivity
4) Access to raw materials
5) Availability of consumer goods
What are some examples of
economic structure?
• Typical workers in LDCs receive $2 per
hour, in MDCs it is $15 per hour
• MDCs tend to have minimum wage laws
• Types of jobs: people in MDCs have more
jobs in tertiary, quaternary and quinary
sectors, while LDCs have more in primary
and secondary sectors
What are some productivity
issues?
• Productivity: value of a particular product
compared to the amount of labor needed to create
it
-Higher in MDCs
• Value Added: the gross value of the product minus
the cost of raw materials and energy
-Workers in MDCs produce more with less effort
because of access to technology, machinery, tools,
etc…
What does access to raw
materials include?
• Development requires raw materials that
will be manufactured
• Need energy sources
• MDCs started looking to colonies and other
states for raw materials after exploiting their
own resources
What does the availability of
consumer goods refer to?
• Wealth generated by MDCs is used to
purchase goods/services
• Most important are those related to
transportation, communication and
technology
What are social indicators of
development?
• Education and literacy (% of state’s adults
who can read/write)
• Health and welfare
What are some demographic
indicators of development?
•
•
•
•
Life expectancy
Infant mortality rate
Natural rate increase
Crude birth rate
What is GNI?
• Gross National Income (GNI): Total value
of goods/services produced by a state per
year plus net income earned abroad by its
nationalists; formerly called gross national
product
Continue…
• Argued that GNI is a more accurate
measure than GDP
• Some states experience a trade imbalance:
-Trade Surplus: (Exports > Imports) and
this adds to the value of an economy
-Trade Deficit: (Exports< Imports) and
this removes value from the economy
Formal Economy vs. Informal
• Formal Economy: legal economy that is
taxed & monitored by the gov. and is
included in GNI
• Informal Economy: economic activity that
is neither taxed nor monitored by a gov. and
is not included in GNI (illegal/black market
or uncounted activities)
What is PPP?
• Purchasing Power Parity: a monetary
measurement of development that takes into
account what money buys in different states
• Ex. Big Mac prices by states (2009):
-USA: $3.54
-Brazil: 8.02 Real  ($3.45 US)
-Philippines: 98.0 Peso  ($2.07 US)