Development Flashcards

Question

what are demographic factors and how do they affect development

Answer 1

link between keeping birth rates down and fighting hunger, poverty and environmental damage

Answer 2

unlikely to be a lot of saving = investment is difficult

Answer 3

poor infrastructure discourgaes MNCs from setting up premises in a country. production costs increase where basic infrastructure is not available

Answer 4

entrepreneurs cannot protect their ideas so do not have incentive to innovate

Answer 5

1. trade liberalisation 2. promotion of FDI 3. removal of government subsidies 4. floating exchange rate systems 5. microfinance schemes 6. privitisation

Answer 6

- free trade = no protectionist barriers - world GDP increases with free trade as output increases when countries specialise - living standards might increase and there could be economic growth - firms grow and export more HOWEVER: - if firms are unable to compete globally they will collapse - causes loss of jobs and limits development and growth

Answer 7

- creates employment, encourages innovation of technology, helps promote long term sustainable growth - funds to invest and develop, overcoming the savings gap - transfer of knowledge and techniques to improve labour productivity HOWEVER: - the often repatriate their profits and exploit the workers by paying low wages and offering poor conditions

Answer 8

- government subsidies could distort price signals by distorting the free market mechanism - inefficient allocation of resources - negative effect on the government budget and cause excessive debts HOWEVER: - they can be an effective way to minimise absolute poverty and ensure a minimum standard of living - removing subsidies can be politically unpopular

Answer 9

- determined by the forces of supply and demand - government doesn't have to worry about gold and foreign currency reserves HOWEVER: - currency will be volatile so it will be difficult for importers and exporters

Answer 10

- microfinance involves borrowing small amounts of money from lenders to finance enterprises - increases incomes of those who borrow, and can reduce their dependency on primary products - multiplier effect - small loans for unbankable people = allows them to break away from aid and gives borrowers financial independence - less vulnerable to shark loans - help businesses be set up HOWEVER: - money is not spent on sustainable methods of development and simply increases the informal economy - people unable to pay their loands back

Answer 11

- assets are transferred from the public sector to the private sector - government sells a firm so that it is no longer in their control - firms operating on free-market have a profit incentive - increases allocative efficiency and higher quality - by selling the asset, revenue is raised for the government HOWEVER: - one-off payment - important it is not privatised as a monopoly

Answer 12

1. development of human capital 2. protectionism 3. managed exchange rates 4. infrastructure development 5. promoting joint ventures with global companies 6. buffer stock schemes

Answer 13

- skills base in the economy would improve - increase productivity and allow more advanced technology - help businesses expand and increase innovation - mover production up the supply chain from primary products to manufactured goods & services HOWEVER: - difficult and expensive

Answer 14

- reduce trade deficit - less imports due to tariffs and quotas - increase AD - protect infant industries - create jobs in the short run HOWEVER: - distort the market leading to a loss of allocative efficiency - prevents industries from competing in a competitive market - loss of consumer welfare: higher prices and less variety - firms don't have competition = less incentive to lower CoP - retaliation from other countries

Answer 15

- provides stability HOWEVER: - more intervention

Answer 16

- social benefits - reduce CoP HOWEVER: - suffer from bribery and corruption - cause environmental damage - intermediate local technology might be a better alternative

Answer 17

- partnership is formed between two firms based in multiple countries - open up new markets for small firms, so they can distribute their products to consumers - saves time and funds - spreads risk = important in industries where producing a product is expensive - benefits of FDI without the negatives of exploitation - some profits remain in the country

Answer 18

- government intervenes with a buffer stock scheme to reduce price volatility - gov buys up harvest during surpluses and then sell the goods onto the market when supplies are low - farmers income are stable - fluctuations in price are reduced - increases consumer welfare by ensuring prices are not in excess HOWEVER: - gov lack of financial resources - storage is difficult and expensive - administrative costs - inefficiency as suppliers produce as much as they want due to the guarantee of gov buying it at whatever price

Answer 19

1. industrialisation: the lewis model 2. development of tourism 3. development of primary industries 4. fairtrade schemes 5. aid 6. debt relief

Answer 20

- based on the assumption that in agriculture, there is a surplus of unproductive labour in developing economies - manufacturing sector, wages are fixed - workers from agriculture are attracted due to higher wages - entrepreneurs change prices above the wage rate, which allows them to make profits - assumed these profits are invested into more fixed capital for the business - demand for labour increases since the productive capacity of firms has increased. surplus of labour from the agriculture sector is employed to the manufacturing sector - grows the manufacturing sector to the extent where the economy moves to manufacturing (traditional state to an industrialised state) HOWEVER: - in reality, profits may not be reinvested - capital investment might replace labour so demand may fall - not always easy for labour to move across - urban poverty

Answer 21

- creates jobs and helps shifts economies away from primary product dependency - developing countries have a higher MPC = multiplier effect - diversify the economy, attract FDI and improve infrastructure - way of earning foreign currency - low technology and labour intensive work HOWEVER: - little revenue retained - travel agents/hotel owners repatriate their profits - issue of overcrowding and loss of inhabitants - income is unstable - relies on the business cycle in developed countries - locals feel stigmatised - environmental damage

Answer 22

- gov exploits raw material advantage - develop the industry so they country can have a comparative advantage - form the livelihoods of the bulk of the population HOWEVER: - primary product dependency

Answer 23

- ensure farmers recieve a fair price for their goods - supermarkets buy a guaranteed quantity at a price above market equilibrium - helps farmers as they have a guaranteed income and certainty about their sales so they can plan for the future - support community development and social projects - working conditions meet a minimum standard - encourages sustainable production, promotes environmental protection and stops the abuse of child labour - promotes self-sufficiency and encourages independence HOWEVER: - producers not part of fairtrade are worse off - divides the market into two separate sections: fairtrade and not - distorts price signals - makes farmers reliant on the sale of their produce

Answer 24

- consumers have a lower MPC than MPS due to limited resources - capital inflows can help fill this savings gap - aid provides temporary assistance to a country - it can also be a grant for a project that a country might not have the funds for - reduce human capital inadequacies - pay off debt - improve infrastructure HOWEVER: - corrupt leaders limit benefits - countries can become dependent on aid - interrupts domestic markets

Answer 25

- partial or total forgiveness of debt - in developing countries, debt is considered to be a principal cause of poverty - causes human suffering and misery, hampers development - high levels of debt = financial resources are diverted from infrastructure, education and healthcare - debt forgiveness can allow a country to import more and increase the standard of living - improves gov finances so public services can be funded HOWEVER: - corruption - encourages more borrowing

Answer 26

- loan funds to memeber countries - focuses on development - aims to promote economic and social progress by raising productivity and reducing poverty - provides microcredit - supporting education - helping the rebuilding of countries after earthquakes

Answer 27

- world bank - imf

Answer 28

- aims to promote monetary cooperation between nations - consults monetary problems - keeps payments and recipients between countries logical and ordered - aims to help free trade globally so the jobs are supported - exchange rate stability - avoids competitive depreciations - members can borrow from the IMF - to gain loans, countries have to promise to undertake reform - reducing imports and gov spending

Answer 29

- funded by gov, firms or private individuals - not part of the gov or for-profit businesses - voluntary groups which aim to raise the voices of ordinary citizens - focus on particular issues such as human rights, healthcare or human rights - lobby the gov to make changes, raise funds and undertake projects in developing countries

Development Flashcards

(53 cards)