4.3 Growth and development Flashcards
Define economic growth
Increase in real GDP and productive potential
Define development
Improvement of living standards
Name 3 characteristics of a developed country
High GDP per capita
Developed infrastructure
High levels of education and healthcare
Name the 3 components of HDI
Health
Education
Living standards
Name 2 advantages and a disadvantage of HDI
Advantage: Easy to calculate, consider things other than GDP
Disadvantage: Doesn’t consider things such as inequality
Name an alternative measure to HDI and explain
Multidimensional poverty Index: assesses poverty at individual, household level using microeconomic data such as school attendance and cooking fuel
What does the Harrod Domar model of growth say?
Growth depends on savings level and capital output
Formula for economic growth according to Harrod Domar model
Growth rate = savings ratio/capital output ratio
Explain the Lewis Dual Sector model of growth
Developing economies switch to manufacturing to be productive, and will industrialise
Name the 5 stages in Rostow’s model of development
1: Traditional society
2: Transitional stage
3: Take off
4: Drive to maturity
5: Mass consumption
Name the 3 sectors in the Fisher Clark model of development
Primary, secondary, tertiary
Name 7 economic factors affecting growth and development
Primary product dependency
Volatility of commodity prices
Infrastructure
Foreign Currency Gap
Capital flight
Debt
Human capital and skills
Name 4 non economic factors affecting growth and development
Corruption
Disease
Geographical area (natural disasters)
Conflict
Name 3 market oriented strategies to encourage growth and development
Trade liberalisation
Floating exchange rate
Microfinance
Name 3 interventionist strategies to encourage growth and development
Develop human capital
Protectionism
Invest in infrastructure
