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Real GDP – measure of value of output economy adjusted for price changes (inflation, deflation) Economic Growth – increase in the capacity of a country to produce goods and services compared from one period of time to the next Negative = recession, depression
Economic Development – broad term used to describe the concentrated efforts of policy makers and community to promote the standard of living and economic health of a specific area Process and policies of a nation to improve social, economic and political well-being of its people Includes development of human capital, infrastructure, regional competitiveness, environmental sustainability, social inclusion, health, safety and literacy initiatives
Human Development – an international and economic development paradigm Creating environments in which people can develop their full potential Expanding people’s choices and improve the human condition by building human capabilities Four Pillars: equity (equal rights and access), sustainability (right to sustainable living and distribution of goods), production (efficient government social programs) , empowerment (effect of general wellbeing)
Absolute Advantage – the ability to produce a good or service at a lower cost per unit than any entity providing the same good or service Comparative Advantage – when two entities can benefit from trade if they have different relative production costs for same good Even a country with an absolute advantage can gain from trade if relative efficiencies are different
Opportunity Costs – the cost of an alternative that must be forgone; benefits sacrificed by taking the alternative action
goods and services through international division of labor by efficiencies catalyzed by international relations. banking and finance. media control. become more self-sufficient and create jobs Week 2 (August 8) Poverty – pronounced deprivation of well-being Low income. improved terms = buy more imports Import Substitution – trade and economic policy which advocate replacing imports with domestic products Reduce foreign dependency. culture and sports Wealthy nations counter attempts to resist influence by economic sanctions and military force Terms of Trade – the quantity of imports which can be purchased through the sale of a fixed quantity of exports Ratio of relative prices. export fees and import quotas Goal to increase material wealth. specialization and competition . and insufficient capacity and opportunity to better one’s life Globalization – increasing unification of the world’s economic order through reduction of barriers such as international trade such as tariffs.Dependency Theory – resources flow from a periphery of poor. underdeveloped countries to a core of wealthy states. cheap labor. inadequate physical security. lack of voice. education. and a destination for obsolete technology Wealthy nations perpetuate dependence through economics. markets for developed nations. inability to acquire basic goods and services necessary for survival with dignity Low levels of health and education. poverty due to how poor countries are integrated into world market (Raul Prebisch) Wealthy states get richer at expense of periphery states Poor nations provide natural resources. poor access to clean water and sanitation. politics.
societies and cultures have become integrated through communication. malaria and other diseases ensure environmental sustainability #8 Develop a global partnership for development - Indigent Line – absolute measure of poverty that seeks to establish the level below which households would not have the resources to maintain a healthy existence Establish minimum food requirements Poverty Line – minimum level of income deemed necessary to achieve an adequate standard of living Total cost of essential resources consumed by an adult in one year Minimum Food Basket – subsistence food requirement Natural set of foods which ensure the minimum necessary quantity of calories. tens of millions of lives will be saved. political and biological factors Commodity Chain – sequential process used by firms to gather resources. and distribute them to consumers Connected path from which goods travel from producers to consumers Four segments: harvesting & cultivation. numerical benchmarks for tackling extreme poverty in its many dimensions provide a framework for the entire international community to work together towards a common end – making sure that human development reaches everyone.- Process by which economies. fibers.relates to the inability to manage one’s own livelihood over a long period Individuals suffer social exclusion and remain locked in poverty from one generation to another . and billions more people will have the opportunity to benefit from the global economy #1 #3 #5 #7 eradicate extreme poverty and hunger #2 achieve universal primary education promote gender equality and empower women #4 reduce child mortality Improve maternal health #6 combat HIV/AIDS. technological. world poverty will be cut by half.Adopted by world leaders in the year 2000 and set to be achieved by 2015. provide concrete. fats and carbohydrates. and marketing & final distribution Millennium Development Goals . processing & packaging. sociocultural. for various social-demographic groups of the population Chronic Poverty . shipping & exporting. everywhere If achieved. transportation and trade Driven by combination of economic. transform them into good or commodities.
employment opportunities. economic and social barriers preventing access to new life skills.Deprivation which is reinforced by administrative.Structural Poverty . improved health care and better housing relates to changes in the structure of the economy or changes in macroeconomic policies Transitory Poverty .results when individuals have a collapse in income but have the capacity to rectify their situation in the short or medium term .