Growth and Development Flashcards
(57 cards)
What is economic growth?
A quantitative increase in a nation’s output of goods and services over time, typically measured by the annual percentage change in real Gross Domestic Product (GDP).
How is economic growth usually measured?
By the growth rate of real Gross Domestic Product (GDP) – the inflation‑adjusted value of all final goods and services produced within a country in a year.
Define economic development.
A broad improvement in the quality of life and well‑being of a population, encompassing higher incomes, better health, education, reduced poverty and inequality, and greater freedoms.
Key difference between growth and development?
Growth measures the SIZE of the economic pie; development assesses how the pie is SHARED and the living standards that result.
What does GDP stand for and capture?
Gross Domestic Product – the monetary value of all final goods and services produced within a country’s borders during a specific period.
Why do economists use GDP per capita?
It divides GDP by population to provide an average income figure, helping compare living standards across countries.
Why adjust GDP for inflation when analysing growth?
Real GDP strips out price changes so growth reflects higher output, not just higher prices.
What is Gross National Income (GNI)?
GDP plus net factor income from abroad (such as wages, dividends, and remittances), reflecting total income earned by a nation’s residents.
Give two limitations of GDP as a welfare measure.
It ignores income distribution and non‑market activities, and does not account for environmental degradation.
What is the Human Development Index (HDI)?
A UNDP composite index combining life expectancy, education (mean & expected years of schooling) and GNI per capita to summarise human development on a 0‑1 scale.
Which three dimensions does HDI include?
Health (life expectancy), Education (years of schooling) and Standard of living (GNI per capita).
What HDI value indicates very high human development?
Around 0.80 and above (e.g., Norway ~0.966).
Define life expectancy at birth.
The average number of years a newborn is expected to live if current mortality rates persist.
What does a high literacy rate indicate?
Widespread basic education and human capital – nearly all adults can read and write.
Explain infant mortality rate (IMR).
Number of infants dying before age one per 1,000 live births – a sensitive indicator of healthcare quality.
What is the poverty headcount ratio?
Percentage of a population living below a defined poverty line (national or the international $2.15/day standard).
Describe the Gini coefficient.
A 0‑to‑1 measure of income inequality; 0 means perfect equality, 1 means one person has all the income.
Name two composite development indices besides HDI.
Multidimensional Poverty Index (MPI) and Gender Development Index (GDI).
What does MPI measure?
Multiple deprivations in health, education and living standards experienced by the same household.
Why include environmental indicators in development measures?
Sustainable development requires considering resource use and ecological impact, e.g., CO₂ emissions per capita.
What trend in economic structure normally accompanies development?
Labour shifts from agriculture to industry and services, reflecting higher productivity sectors.
Give an example of growth without development.
Oil‑rich states where GDP is high but large segments lack quality health or education services.
Provide an example of development outpacing growth.
Cuba: modest GDP per capita but high HDI due to excellent healthcare and literacy.
State Norway’s HDI rank and approximate value.
Consistently top‑5, ~0.966 (very high).
