THEME 4 - Topic 5 - Emerging & Developing Economies

Question 1

Define development (edexcel definition)

Answer 1

A process by which per capita incomes are increased and the inhabitants of a country are able to benefit from improved living conditions, i.e lower poverty and enhanced standards of education, health, nutrition and other essentials of life.

Question 2

Define tiger economies

Answer 2

A group of economies in South East Asia that enjoyed rapid economic growth from the 1960s.

Question 3

Define emerging economies

Answer 3

Economies that have experienced rapid economic growth with some industrialisation and characteristics of developed markets.

Question 4

Define BRICS countries

Answer 4

A group of countries comprising Brazil, Russia, India, China and South Africa that have made rapid progress in recent years.

Question 5

What are the 3 dimensions of the HDI?

Answer 5

Standard of living, knowledge and longevity.

Question 6

What are the 4 indicators of HDI?

Answer 6

Standard of living - GNI per capita PPP
Knowledge - Mean yrs schooling and Expected yrs schooling
Longevity - Life expectancy

Question 7

What is the HDI value for low human development?

Answer 7

Less than 0.55

Question 8

What is the HDI value for medium human development?

Answer 8

0.55 to 0.699

Question 9

What is the HDI value for high human development?

Answer 9

0.7 to 0.799

Question 10

What is the HDI value for very high human development?

Answer 10

Greater than 0.8

Question 11

Define HDI

Answer 11

A composite indicators of the level of a country’s development, varying between 0 and 1, comprising 3 dimensions and 4 indicators.

Question 12

What are the stages of the low-level equilibrium trap?

Answer 12

1. Capital shortage leads to low productivity
2. So low per capita incomes
3. So low savings
4. So less money for banks to lend so low investment

Question 13

Define Rostow’s stages of economic growth

Answer 13

A process described by economic historian Walt Rostow, which sets out 5 stages through which he claimed all developing countries would pass.

Question 14

State the 5 stages of Rostow’s model

Answer 14

1. Traditional society
2. Preconditions period
3. Take-off
4. Drive to maturity
5. Age of mass consumption

Question 15

What is the savings gap?

Answer 15

The difference between the current level of savings, and the savings needed for take-off.

Question 16

Define industrialisation

Answer 16

A process of transforming an economy by expanding manufacturing and other industrial activity.

Question 17

What did Arthur Lewis say would happen to labour productivity on the land?

Answer 17

Eventually, due to the law of diminishing marginal returns, many workers would have 0 marginal productivity.

Question 18

Define the Lewis Dual Sector Model

Answer 18

A model developed by Sir Arthur Lewis which argued that LDCs could be seen as being typified by 2 sectors, traditional and modern, and that labour could be transferred from the traditional to the modern sector in order to bring about economic growth and development.

Question 19

Define the Harrod-Domar Model

Answer 19

A model of economic growth that emphasises the importance of savings and investment, decreasing the capital-output ratio.

Question 20

State the 4 stages of the Harrod-Domar Model

Answer 20

1. Savings
2. Investment
3. Capital accumulation
4. Output and income

Question 21

State the formula of the savings-ratio

Answer 21

g = S / k

Question 22

Define foreign currency gap

Answer 22

A situation in which an LDC is unable to import the goods that it needs for development because of a shortage of foreign exchange.

Question 23

Define market-friendly growth

Answer 23

An approach to economic growth in which governments are recommended to intervene less where markets can operate effectively, but to intervene more strongly where markets are seen to fail.

Question 24

Define infrastructure

Answer 24

The complex of physical capital goods needed to support development in the form of roads, communication, networks, market, education and healthcare facilities etc.

Question 25

Define sustainable development

Answer 25

Meeting the needs of the current generation without compromising the ability of future generations to meet their own needs.

Question 26

Define export-led growth

Answer 26

A situtation in which economic growth is achieved through the exploitation of economies of scale made possible by focusing on exports and so reaching a wider market than would be available within the domestic economy.

Question 27

What is the UK's current population growth rate?

Answer 27

0.8%

Question 28

What is the population growth rate of LDCs?

Answer 28

Greater than 3%

Question 29

What is the replacement ratio?

Answer 29

2.1 children per woman

Question 30

What is the UK's birth rate?

Answer 30

1.4 children per woman

Question 31

Define demographic transition

Answer 31

A process through which many countries have been observed to pass whereby improved health lowers the death rate, and the birth rate subsequently also falls, leading to a low and stable population growth.

Question 32

Define sharecropping

Answer 32

A form of land tenure system in which the landlord and tenant share the crop.