Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

MACRO ECONOMICS IMPROVED > T4 EMERGING AND DEVELOPING ECONOMIES > Flashcards

T4 EMERGING AND DEVELOPING ECONOMIES Flashcards

(80 cards)

Start Studying
1
Q

What is meant by Low Human Capital

A

When workers don’t have the necessary knowledge, skills or assets to be productive.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

If the standard of education is poor, students will leave school with:

A

Low human capital

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What are the 10 constraints to economic growth and development

A

Poor education
Poor infrastructure
Poor health
Population growth
savings gap
property rights
corruption
being landlocked
primary product dependency
infant industries

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is the HDI and what does it include as indicators?

A

It is a measure of development which includes education, health and living standards.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

how does the HDI measure education

A

(average years of schooling),

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

how does the HDI measure health

A

(life expectancy)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

How does the HDI measure living standards

A

(real GNI per capita).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is the I-HDI

A

The IHDI is the normal HDI adjusted to account for different levels of inequality. If the IHDI is below the HDI, then there is inequality.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is the advantage of the HDI

A

The first advantage of the HDI is that it is holistic- it focuses on a range of indicators rather than just one.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is the disadvantage of the HDI

A

The first disadvantage of the HDI is that it can still be unreliable as there are many indicators that it does not use.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What does an HDI value of 0.95 mean?

A

Very High development

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the 5 indicators of development

A

Access to clean water, number of mobile phones, energy consumption, Access to the internet. Proportion of population in agricultural work.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

the definition of: Economic Development

A

incrase in the living standards in an economy.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What three indicators does HDI measure?

A

Education, years of school.

Health, life expectancy at birth.

Living standards, real GNI per capita

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is Gross National Income?

A

Gross National Income is Gross Domestic Product plus the net income from abroad.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

How is gross national income per capita calculated

A

gross national income divided by the country’s population .

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are the three measures used by the Human Development Index to determine the level of development based on the indicators

A

Life expectancy, real GNI per capita and average years spent in school

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

If a country’s HDI value is between 0 and 0.49 it has

A

low development

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

If a country’s HDI value is between 0.50 and 0.69 it has

A

medium development

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

If a country’s HDI value is between 0.70 and 0.79, we say that country has

A

high development

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What does a high Gini coefficient mean for an economy?

A

more unequal economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Whats does IHDI account for

A

IHDI accounts for the distribution of development within a country.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What are the 3 measures of development

A

HDI
IHDI
Multi dimensional. Poverty Index (MPI)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What else does the multidimensional poverty index measure that the HDI doesn’t

A

The average intensity of poverty

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Unlike with HDI and IHDI, a high multidimensional poverty index means that a country has ???? levels of development.
low
26
What does the Multidimensional Poverty Index measure?
Measures education, health and living standard using 10 different indicators. It measures the number of people in poverty and the average intensity of poverty.
27
What are the two main reasons for low savings ratio
Low income - many people in developing countries don’t earn enough to have money left to save small amount of banks to save in -, which are often far away and not always seen as secure
28
What is meant by a savings gap
when there is a gap between the amount of money held at banks, in the form of savings, and the amount of money that firms want to borrow from banks.
29
Explain the harrod-domar model
Low incomes Low savings No money in the bank to lend Low investment Low AD and low LRAS Low economic growth Low incomes
30
What is Microfinance
Small loans provided to small businesses who otherwise would have no access to financial services
31
How should microfinance loans affect small businesses? (chain of reasons)
Increase productivity → Decreases unit costs → More competitive prices → Increase incomes
32
What is the impact of higher incomes on the savings gap?
it will decrease
33
Why might microfinance not lead to economic development?
Microfinance lenders may charge very high interest rates
34
What are property rights?
The legal right to your property
35
Possessions without property rights are called
dead capital
36
Dead capital can not be used as:
Collateral when taking out a loan
37
What does it mean if assets are given property rights?
They can be used as collateral when taking out loans with a bank
38
What is collateral
An asset given as security for the repayment of a loan
39
Is allocating property rights a market based or interventionist policy for development?
market based
40
Why might a strategy of assigning property rights not lead to economic development?
If it doesn't lead to an increase in the number of people taking out loans
41
What is the definition of corruption
Corruption is when people working for the government use government funds for their own private expenses.
42
What is the Fair Trade premium?
Money from the sale of products which can be used by farmers to pay for development themselves
43
What is the fair trade scheme
a communal fund for Fair Trade farmers.
44
How can Fair Trade schemes lead to economic development?
Increase farmers’ incomes → Increase aggregate demand → Increase real GDP → Increase economic growth
45
What is the world bank
A bank for countries which promotes development by offering development loans and debt relief.
46
What two core things can the World Bank provide developing nations?
debt relief development loan
47
How much money did the World Bank loan out in 2016?
World Bank loaned out $61 billion to countries in need of development loans.
48
What is the IMF
An organisation which monitors the global economy to ensure that it is healthy and stable.
49
What are the roles of the IMF
oversee economic development. provide bailouts to struggling economies.
50
How does the IMF promote growth and development
Maintaining stability in the global economy occasionally provides bailouts to countries in need
51
How much money did the International Monetary Fund give to Greece as a bailout in 2010?
a $147 billion bailout
52
What are NGO's
Organisations that help to promote development by focusing on smaller-scale, specific issues.
53
How do NGO's promote growth on development
Focus on smaller more specific issues, operate on a local scale.
54
benefit of NGO vs IMF or World bank
Smaller scale operations, less bureaucratic and more localised knowledge
55
How many NGO's are there across the world
estimated 10 million
56
disadvantages of NGO's
smaller budgets compared to IMF or World Bank
57
what are infant industries
Infant industries are industries which are too small to benefit from economies of scale
58
how do infant industries constrain growth and development
Inefficienct as they dont beenfit from eos. funds to support infant industries have an oppurtunity cost.
59
what is meant by protectionism
economic policies and measures taken by a government to shield domestic industries from foreign competition.
60
What are the four types of restrictions on free trade
tariffs quotas subsidies non trade barriers (regulations for example)
61
Why might protectionism and subsidies not lead to improvements in domestic growth and development
may encourage laziness and inefficiency
62
what is competitive devaluation
Where a government reduces the value of their fixed exchange rate in order to make exports more competitive.
63
how can competitive devaluation increase development
Foreign demand for exports increases More output, increase incomes for workers ad increases, real gdp increases, development improves
64
what are two main ways to depreciate a currency:
lower interest rate sell domestic currency
65
eval to competetive de valuation
Imported inflation Higher prices for fuel, food, and inputs can hurt consumers and producers Retaliation Trading partners may devalue too, impose tariffs, or restrict trade
66
what is meant by a foreign currency gap
A foreign currency gap occurs when the amount of foreign currency in a country decreases. The most common cause is when net imports are greater than net exports
67
how can a foreign currency gap restrain development
developing countries often need to import machinery, equipment, and technology for industrialization. Without enough foreign currency, they can’t afford these imports, slowing down economic growth
68
what are the three characteristics of primary products
demand for primary products is inelastic supply of primary products is price inelastic demand is income inelastic
69
what is a negative impact of primary products inelastic supply and demand
Price instability : The supply and demand curves for primary products are very steep. This means that any change in supply or demand leads to a very large change in price
70
what is a primary product
a good made from raw materials
71
why does price instability of primary products, constrain growth and development
Unstable prices make it much harder for investors to predict future prices. This makes it harder for them to predict their future revenue and, therefore, their future profit. This means investments in the country remains low, so does ad / lras and real gdp. also less profit means less corp tax rev
72
what is the main purpose of the buffer stock scheme
To reduce extreme fluctuations in the price of primary products
73
what is the prebisch singer hypothesis
As world income grows, there will be a small increase in demand for primary products, but there will be a large increase in demand for manufactured products. This means that the price of manufactured products will increase by much more than the price of primary products. This will worsen the terms of trade for countries who depend on exporting primary products and importing manufactured products.
74
What is the Lewis model for industrialisation
As countries industrialise, manufacturing firms will make more profit and increase investment. This will increase their demand for labour which will increase wages and attract even more workers into the manufacturing sector moving people away from primary product industries. Making them less vulnerable to the prebisch-singer hypothesis and price instability.
75
Why might industrialisation not improve economic growth
Through transfer pricing, manufacturing companies can avoid paying corporation tax in developing countries. No money for government to spend on development
76
how much tax is lost through transfer pricing each year
estimated several hundred billion usd
77
What is meant by industrialisation
Where the main industry in a country shifts from agriculture to manufacturing.
78
What are the 2 reasons why inequality limits economic growth
WEAKER AD: Poorer individuals tend to spend a higher proportion of their income, while the rich save more. High inequality means more income goes to those who spend less, reducing overall consumption in the economy. REDUCED HUMAN CAPITAL: When income is concentrated in the hands of a few, poorer households may lack access to quality education, healthcare, and nutrition. This limits the skills and productivity of a large portion of the population.
79
what is often the cause of industrialisation in undeveloped countries
large multinational corporations setting up factories/offices in their country to take advantage of the low cost of productions.
80

MACRO ECONOMICS IMPROVED (10 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions