Economic Development Flashcards
(26 cards)
What is economic development?
Improvements in standard of living of a country’s inhabitants, it necessitates a change in economic structure and possibly change in political and social attitudes and institutions
What are the sectors of an economy?
Primary, secondary, tertiary and quaternary
What is in the primary sector?
Extraction of raw materials, agriculture or growing of crops e.g farming, fishing and mining
What is in the secondary sector?
Manufacturing of goods e.g construction, assembly
What is in the Tertiary sector?
The provision of services e.g real estate, education and finance
What is the quaternary sector?
ICT, technology
What is sustainable development?
Development that meets the needs of the present without compromising the ability of future generations to meet their own needs
How does economic growth link to economic development?
Economic growth can stimulate development as higher GDP/capita, improvements in public services, greener technologies
HOWEVER, it doesn’t guarantee sustainable development as environmental capital stock shouldn’t diminish over time, income and gender inequalities still exist
Can economic development be achieved without economic growth?
No, but growth alone doesn’t guarantee development.government policy measures need to be used to ensure the proceeds from growth are distributed by increasing standard of living and eradicating poverty
What are ways of measuring economic growth?
> GDP
GNI per capita
Human development index
Genuine progress indicator
Easterlin paradox
Gender inequality
What is GDP?
Gross domestic product, total value of all goods and services produced within an economy
What is an advantage of using GDP to measure economic development?
Simple measure that is objective
What is an disadvantage of using GDP to measure economic development?
Vey limited statistic, only looks at income of a country
What is an advantage of using GNI per capita to measure economic development?
Accurately represents the incomes of inhabitants including net income flows between countries
What is an disadvantage of using GNI per capita to measure economic development?
Exchange rate problems, it doesn’t represent distribution across society, social indicators and environmental factors are not included
What is the human development index?
GNI per capita, life expectancy, mean/ expected years in schooling
What is an advantage of using HDI to measure economic development?
Attempts to include a broader range of factors
What is an disadvantage of using HDI to measure economic development?
Only three components- misses environmental and social factors
What is the genuine progress indicator?
26 components covering economic, environmental and social factors
What is an advantage of using genuine progress indicators to measure economic development?
Broader measure than HDI
What is an disadvantage of using genuine progress indicators to measure economic development?
Assigning economic value can be difficult distorting accuracy of the measure
What is the easterlin paradox?
A measure of happiness
What is an advantage of using Easterlin paradox to measure economic development?
Happiness doesn’t increase with income over time
What is an advantage of using the Easterlin paradox to measure economic development?
Happiness is subjective and hard to quantify
