Professional Documents
Culture Documents
LEARNING OBJECTIVES
Knowledge: 1. Define global stratification and describe the major sources of stratification as
Remembering previously related to economies in different parts of the world.
learned material
2. Describe fully the economic categories used by the World Bank: low-income,
middle-income, and high-income economies.
Comprehension: 3. Summarize the “Three Worlds” approach and levels of development approach to
The ability to grasp the understanding global inequality.
meaning of the material
4. Explain how measures of global wealth and poverty are determined.
5. Describe the Gini coefficient and explain how it is used to understand global
quality of life issues.
Application: 6. Elaborate on the correct use of terms “absolute,” “relative,” and “subjective”
The ability to use material poverty.
in new and concrete
situations
Analysis: The ability to 7. Interpret global poverty using human development issues such as life expectancy,
break down material into health, education and literacy.
its component parts so that
its organizational structure 8. Differentiate and summarize theories of global inequality, such as: “development
may be understood and modernization theory,” “dependency theory,” “world systems theory,” and
“the new international division of labor theory.”
Synthesis: The ability to 9. Compare pessimistic and optimistic views on global inequality in the future.
put parts together to form a
new whole
Evaluation: The ability to 10. Determine which theory of Global Inequality best explains the current world
judge the value of material economic condition.
for a given purpose
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Global Stratification
1. __________ stratification refers to the unequal distribution of wealth, power, and prestige
on a worldwide basis, resulting in people having vastly different lifestyles and life chances
both within and among the nations of the world.
a. Universal
b. Planetary
c. Global
d. Cosmic
2. The income gap between the richest and the poorest 20 percent of the world population
__________.
3. In 1960, the highest-income 20 percent of the world’s population received $30 for each
dollar received by the lowest-income 20 percent of the world’s population. By 2000, the
disparity had __________.
4. The income gaps between the richest and the poorest countries of the world are
__________ than they are in the United States.
a. more pronounced
b. less pronounced
c. more equal
d. less stratified
a. Middle-income countries
b. Low-income countries
c. High-income countries
d. Relative-income countries
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6. __________ are nations with industrializing economies, particularly in urban areas, and
moderate levels of national and personal income.
a. Relative-income countries
b. Middle-income countries
c. High-income countries
d. Low-income countries
7. Low-income countries are primarily __________ with little industrialization and low levels
of national and personal income.
a. service-oriented nations
b. pastoral nations
c. urbanized nations
d. agrarian nations
8. The gap in global income differences between rich and poor countries has __________
over the past 50 years.
a. continued to widen
b. decreased slightly
c. decreased significantly
d. remained stable with basically no change
9. In 1960, the highest income 20 percent of the world’s population received $30 for each
dollar received by the lowest-income 20 percent. By 2000, the difference had increased
from $___ to $1.
a. 40
b. 55
c. 74
d. 92
10. In 1960, the wealthiest 20 percent of the world population had more than 30 times the
income of the poorest 20 percent of the world population. By 2000, the wealthiest 20
percent of the world population had almost __________ the income of the poorest 20
percent of the world population.
a. 50 times
b. 67 times
c. 80 times
d. 95 times
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Global Stratification
11. __________ has become the primary means used in attempts to reduce social and
economic inequalities and alleviate the worst effects of poverty in the less industrialized
nations of the world.
a. Evolution
b. Development
c. Evaluation
d. Degeneration
a. $1 per day.
b. $20 per day.
c. $50 per month.
d. $750 per year.
13. Approximately ______ people worldwide live on less than $1 per day.
a. 50 million
b. 150 million
c. 400 million
d. 1 billion
14. One problem encountered by social scientists studying __________ and social and
economic inequality is what terminology should be used to refer to the distribution of
resources in various nations.
a. cosmic stratification
b. universal stratification
c. planetary stratification
d. global stratification
15. After __________, the terms “First World,” “Second World,” and “Third World” were
introduced by social analysts.
a. World War I
b. the Korean War
c. World War II
d. the Vietnam War
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16. The ___________ was introduced by social analysts to distinguish among nations on the
basis of their levels of economic development and the standard of living of their citizens.
17. __________ were said to consist of the rich, industrialized nations that primarily had
capitalist economic systems and democratic political systems.
18. The most frequently noted __________ nations are the United States, Canada, Japan,
Great Britain, Australia, and New Zealand.
a. third world
b. second world
c. first world
d. fourth world
19. __________ are said to be countries with at least a moderate level of economic
development and a moderate standard of living.
20. __________ nations include China, North Korea, Vietnam, Cuba, and portions of the
former Soviet Union.
a. Second world
b. Fourth world
c. First world
d. Third world
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Global Stratification
21. People living in the __________, the poorest countries, have little or no
industrialization and the lowest standards of living, shortest life expectancies, and
highest rates of mortality.
a. first world
b. second world
c. third world
d. fourth world
22. The _______ plan, named after a U.S. Secretary of State provided massive sums of
money in direct aid and loans to rebuild the European economic base destroyed during
World War II.
a. Albright Plan
b. Baker Plan
c. Southern Plan
d. Marshall Plan
a. President Roosevelt
b. President Eisenhower
c. President Truman
d. President Kennedy
24. The term ________ refers to all of the goods and services produced in a country within a
given year, plus the net income earned outside the country by individuals and
corporations.
25. The term __________ refers to material well-being that can be measured by the quality
of goods and services that may be purchased by the per capita national income.
a. standard of living
b. standard of development
c. standard of the economy
d. standard of life
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26. An increase in the __________ means that a nation is moving toward economic
development, which typically includes the improved exploitation of natural resources by
industrial development.
27. Some analysts in developed nations have begun to link growing social and economic
inequality on a global basis to relatively high rates of __________ taking place in the
underdeveloped nations.
a. divorce
b. infant mortality
c. population growth
d. marriage
28. As a result of the 1992 U.N. Conference on Environment and Development in Rio de
Janeiro, terms such as underdevelopment have largely been dropped in favor of
measurements such as sustainable development, and economies are now classified by
their __________.
a. material well-being
b. levels of economic development
c. levels of income
d. standard of living
29. The World Bank focuses on these three development themes in classifying nations into
economic categories: __________.
30. About ______ of the world's population lives in the sixty-four low-income economies,
where most people engage in agricultural pursuits, reside in nonurban areas, and are
impoverished.
a. 25 percent
b. 33 percent
c. 50 percent
d. 75 percent
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Global Stratification
31. Low-income economies are primarily found in countries in __________, where half of the
world’s population resides.
32. Among those most affected by poverty in low-income economies are __________.
33. Many poor women worldwide do not have access to commercial credit and have been
trained only in traditionally female skills that produce low wages. These factors have
contributed to the __________, whereby women around the world tend to be more
impoverished than men.
35. About _________ of the world's population resides in the ninety-three nations with
middle-income economies.
a. one-half
b. one-third
c. one-fourth
d. one-fifth
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36. The World Bank divides middle-income economies into lower-middle income and
upper-middle income. Bolivia, Columbia, Guatemala, and El Salvador are classified
as ____________.
a. high-income countries
b. upper-middle-income countries
c. lower-middle-income countries
d. low-income countries
37. According to the World Bank, some nations have been more successful than others in
implementing key elements of change and bringing about a higher standard of living for
their citizens. Which of the following factors was not cited as visible signs of problems in
the transition toward a free market economy?
39. The World Bank divides middle-income economies into lower-middle and upper-middle.
Argentina, Chile, Hungary, Mexico, and Saudi Arabia are considered nations with
__________ economies.
a. upper-middle-income
b. high-income
c. lower-middle-income
d. low-income
a. These immigrants are often poorer than those who migrate from south to north.
b. They are more likely to travel without paper documentation.
c. They are more vulnerable to (unscrupulous) people.
d. Unlike south to north migrants, they tend not to send money back to their
families.
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Global Stratification
42. What is one major result of requiring middle-income countries to make payments on their
debts to lending agencies?
a. They limit their exports of raw materials and fuels resulting in global fuel and raw
material shortages.
b. They make spending cuts in programs that were intended to help the poor,
creating poverty in their country.
c. A large proportion of the resources for private housing are cut, resulting in
housing shortages.
d. The World Bank places the monies in education funds for the children in that
country.
43. __________ economies are found in fifty-four nations, including Portugal, Ireland, Israel,
Italy, Norway, and Germany.
a. Low-income
b. Lower-middle-income
c. Upper-middle-income
d. High-income
44. Nations with __________ continue to dominate the world economy, despite the fact that
shifts in the global marketplace have affected some workers who have found themselves
without work due to capital flight.
a. lower-middle-income economies
b. low-income economies
c. higher-income economies
d. upper-middle-income economies
45. _____ is the movement of jobs and economic resources from one nation to another.
a. Deindustrialization
b. Economic mobility
c. Capital flight
d. Capital movement
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46. __________ is the closing of plants and factories because of their obsolescence or the
fact that workers in other nations are being hired to do the work more cheaply.
a. Reindustrialization
b. Capital flight
c. Decapitalization
d. Deindustrialization
47. The only significant group of middle-and lower-income economies to close the gap
with the high-income economies over the past few decades has been the nations
of __________.
a. East Asia
b. Latin America
c. West Africa
d. Europe
48. What country has experienced a 270 percent increase in per capita income over the past
twenty years?
a. South Korea
b. China
c. Thailand
d. Malaysia
49. The United Nations and the World Bank now use the term ___________ to indicate all of
the goods and services produced with a country's economy during a given year.
50. What is the major distinctive characteristic of using the gross domestic product (GDP)
versus the gross national index (GNI) as a measure of economic growth?
a. The GDP does not include income earned by individuals or corporations if the
revenue comes from sources outside the country.
b. The GDP includes income earned by corporations from sources outside the
country, but not earned by individuals.
c. The GDP includes individual income earned from sources outside the country,
but not earned by corporations.
d. The GDP includes incomes earned by both individuals and corporations
regardless of source.
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51. Using the gross domestic product (GDP) as a measure of economic growth, a recent
World Bank report concluded that nations such as _________ were well on their way to
becoming economic powerhouses in the next twenty-five years.
52. A condition in which people do not have the means to secure the most basic necessities
of life is called __________.
a. standard poverty
b. absolute poverty
c. relative poverty
d. subjective poverty
a. Relative
b. Subjective
c. Standard
d. Absolute
54. The World Bank has defined __________ as living on less than a dollar a day.
a. absolute poverty
b. standard poverty
c. relative poverty
d. subjective poverty
55. _________ exists when people may be able to afford basic necessities but are still
unable to maintain an average standard of living.
a. Relative poverty
b. Absolute poverty
c. Subjective poverty
d. Standard poverty
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56. __________ poverty is measured by comparing one person’s income with the incomes
of others.
a. Absolute
b. Subjective
c. Relative
d. Standard
57. _________ poverty would be measured by comparing the actual income against the
income earner's expectations and perceptions.
a. Absolute
b. Relative
c. Standard
d. Subjective
58. For low-income nations in a state of economic transition, data on income and levels of
consumption are typically difficult to obtain and are often ambiguous when they are
available. Defining levels of poverty involves several dimensions. Which of the following
was not a dimension cited?
59. The World Bank uses as its measure of income inequality what is known as the
__________, which ranges from zero (meaning that everyone has the same income) to
100 (meaning that one person receives all the income).
a. Helmicki coefficient
b. Georgia equation
c. Gyro formula
d. Gini coefficient
60. It is estimated that 652 million of Asia’s people are poor and that 448 million of them live
in __________.
a. India
b. China
c. the Philippines
d. North Korea
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61. In 1990, the United Nations introduced the __________, establishing three new criteria,
in addition to the gross domestic product, for measuring the level of advancement in a
country: life expectancy, education, and living standards.
62. According to the __________, human development is the process of “expanding choices
that people have in life, to lead a life to its full potential and indignity, through expanding
capabilities and through people taking action themselves to improve their lives.”
a. Peace Corps
b. American Red Cross
c. United Nations
d. North American Trade Organization
63. According to the United Nations, __________ is the process of “expanding choices that
people have in life, to lead a life to its full potential and in dignity, through expanding
capabilities and through people taking action themselves to improve their lives.”
a. life expectancy
b. life span
c. human development
d. global development
64. The World Bank calculates that __________ of the population in low- and middle-income
countries lack the essentials of well-being.
a. 25%
b. 37%
c. 52%
d. 60%
65. __________ account for most of the 700 million “income poor” people in the world.
a. Women
b. Children
c. Men
d. Adolescents
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66. Average life expectancy has increased by about a third in the past three decades and is
now more than 70 years in __________ countries.
a. 53
b. 66
c. 75
d. 87
67. Average life expectancy has increased by about a third in the past three decades.
Although no country has a life expectancy rate of 80 years for men, __________ some
countries now have a life expectancy rate of 80 years or more for women.
a. 12
b. 19
c. 25
d. 33
68. The average life expectancy at birth of people in middle-income countries remains about
________ years less than that of people in high-income countries.
a. 5
b. 12
c. 18
d. 25
69. The average life expectancy at birth of people in low-income countries is about
__________ years less than that of people in high-income nations.
a. 15
b. 23
c. 30
d. 35
70. One major cause of shorter life expectancy in low-income nations is the high
_______ rate.
a. crude-birth
b. fertility
c. infant mortality
d. crude-death
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71. The __________ (deaths per thousand live births) is more than eight times higher in low-
income countries than in high-income countries.
72. Low-income countries typically have higher rates of illness and disease, and they do not
have adequate health care facilities. __________ is a common problem among children,
many of whom are underweight, stunted, and have anemia.
a. Alcohol abuse
b. Drug abuse
c. Obesity
d. Malnutrition
73. Which part of the world has the lowest life expectancy?
a. Middle East
b. Latin America
c. South Asia
d. Sub-Saharan Africa
74. Which part of the world (at 47%) has the highest percentage of the world’s illiterate
population age 15 and older?
a. Middle East
b. Latin America
c. South Asia
d. Sub-Saharan Africa
75. Approximately ____ percent of the world’s illiterate population age 15 and older live in
South Asia.
a. 23
b. 38
c. 47
d. 60
76. Health is defined in the Constitution of the World Health Organization as __________.
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77. Many people in low-income nations remain in poor health. In fact, about __________
million people die each year from diarrhea, malaria, tuberculosis, and other infections and
parasitic illnesses.
a. 5
b. 17
c. 33
d. 75
78. The United Nations Educational, Scientific and Cultural Organization (UNESCO) defines
a _________ person as “someone who can, with understanding, both read and write a
short, simple statement on their everyday life”.
a. functional illiterate
b. functional literate
c. literate
d. basic illiterate
79. The adult literacy rate in the low-income countries is about half that of the high-income
countries. __________ constitute about two-thirds of those who are illiterate in the low-
income countries.
a. Men
b. Women
c. Children
d. Adolescents
80. There are approximately __________ literate women for every 100 literate men. Literacy
is crucial for women because it has been closely linked to decreases in childbirth,
improved child health, and increased earnings potential.
a. 55
b. 67
c. 74
d. 90
81. The gap between some richer and middle- or lower-income nations has __________for
life expectancy, adult literacy, and daily calorie supply.
a. continued to widen
b. narrowed significantly
c. remained the same for three decades
d. narrowed only within the past decade
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Global Stratification
82. Poverty, food shortages, hunger, and rapidly growing populations are pressing problems
for at least __________ people, most of them women and children living in a state of
absolute poverty.
a. 4.7 billion
b. 500 million
c. 800 million
d. 1.3 billion
83. According to some social scientists, global wealth and poverty are linked to the level of
__________ and economic development in a given society. It almost inevitably brings
with it a higher standard of living in a nation and some degree of social mobility for
individual participants in the society.
a. industrialization
b. capitalization
c. urbanization
d. welfare socialism
84. The most widely known development theory is __________, which is a perspective that
links global inequality to different levels of economic development and suggests that low-
income economies can move to middle- and high-income economies by achieving self-
sustained economic growth.
a. dependency theory
b. world systems theory
c. modernization theory
d. the new international division of labor theory
85. According to __________, the low-income, less-developed nations can improve their
standard of living only with a period of intensive economic growth and accompanying
changes in people’s beliefs, values, and attitudes toward work.
86. The number of hours that people work at their jobs each week is one measure of the
extent to which individuals subscribe to the work ethic, which is a core value widely
believed to be of great significance in the __________ process.
a. urbanization
b. modernization
c. dependency
d. capitalization
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87. According to Walt Rostow, economic advisor to U.S. President Kennedy, one of the
largest barriers to development in low-income nations was the __________ held by
people, particularly beliefs that are fatalistic, such as viewing extreme hardship and
economic deprivation as inevitable and unavoidable facts of life.
88. According to economic advisor Walt Rostow, all countries go through four stages of
economic development. Which of the following represents the correct sequence of
economic development stages?
89. According to Walt Rostow, economic advisor to U.S. President Kennedy, all countries go
through four stages of economic development. The first stage is the __________, in
which very little social change takes place, and people do not identify a need to change
their current circumstances.
a. traditional stage
b. high mass consumption stage
c. take-off stage
d. technological maturity stage
90. According to economic advisor Walt Rostow, societies in the __________ stage are slow
to change because the people hold a fatalistic value system, do not subscribe to the work
ethic, and save very little money.
a. take-off
b. technological maturity
c. traditional
d. high mass consumption
91. Mary is currently working as a teller in a local bank and she does not believe that she will
ever be promoted beyond that position. In fact, she has adopted a belief that she will
probably die in her current position. According to Walt Rostow, this exemplifies the
__________ of economic development.
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Global Stratification
92. According to Walt Rostow, economic advisor to U.S. President Kennedy, all countries go
through four stages of economic development. The second stage is the __________
stage, which is a period of economic growth accompanied by a growing belief in
individualism, competition, and achievement.
a. traditional
b. take-off
c. technological maturity
d. high mass consumption
93. According to economic advisor Walt Rostow, people in the __________ start to look
toward the future, to save and invest money, and to discard traditional values.
a. take-off stage
b. high mass consumption stage
c. nontraditional stage
d. technological stage
94. According to Walt Rostow, economic advisor to U.S. President Kennedy, all countries go
through four stages of economic development. In the third stage referred to as the
__________, the country reinvests in new industries, and embraces the beliefs, values,
and social institutions of the high-income, developed nations.
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97. In relation to economic inequality, the dependency theory, world systems theory,
and the new international division of labor theory are perspectives rooted in the
__________ approach.
a. postmodern
b. functionalist
c. symbolic interactionist
d. conflict
98. The __________ states that global poverty can at least partially be attributed to the fact
that the low-income countries have been exploited by the high-income countries.
99. According to the __________, poorer nations are trapped in a cycle of structural reliance
on the richer nations due to their need for infusions of foreign capital and external
markets for their raw materials, making it impossible for the poorer nations to pursue their
own economic and human development.
a. modernization theory
b. world systems theory
c. dependency theory
d. new international division of labor theory
100. According to sociologist Immanuel Wallerstein, the _________ theory suggests that what
exists under capitalism is a truly global system that is held together by economic ties.
a. dependency
b. new international division of labor
c. world systems
d. modernization
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Global Stratification
TRUE-FALSE SECTION
1. Global stratification refers to the unequal distribution of wealth, power, and prestige on a
global basis, resulting in people having vastly different lifestyles and life chances both
within and among the nations of the world.
2. Low-income countries are primarily hunting and gathering nations with some
industrialization and moderate levels of national and personal income.
3. In 1960, the wealthiest 20 percent of the world population had more than 30 times the
income of the poorest 20 percent of the world population. By 2000, the wealthiest 20
percent of the world population had almost 80 times the income of the poorest 20 percent
of the world population.
4. Third world nations consist of the rich, industrialized nations that have capitalist economic
systems and democratic political systems.
Rejoinder: The correct response is First world nations. Third world nations are the
poorest countries with little or no industrialization and the lowest standards of living,
shortest life expectancies, and highest rates of mortality.
5. Following the Vietnam War, the Marshall Plan provided massive sums of money in direct
aid and loans to rebuild the Southeast Asian economic base destroyed during the war.
Rejoinder: The Marshall Plan was actually devised following World War II and provided
money in direct aid and loans to rebuild the European economic base destroyed during
the was.
6. Today, gross national income (GNI) is a term that refers to all the goods and services
produced in a country in a given year, plus the net income earned outside the country by
individuals or corporations.
7. About one-half of the world’s population lives in the ninety-three high-income economies,
where most people engage in agricultural pursuits, reside in nonurban areas, and are
impoverished.
Rejoinder: The correct information is as follows: about half of the world’s population lives
in the sixty-one low-income economies; about one-third of the world’s population resides
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8. Today, the World Bank focuses on three development themes: people, the environment,
and the economy.
9. Many poor women worldwide also do not have access to commercial credit and have
been trained only in traditionally female skills that produce low wages. These factors
have contributed to the global feminization of poverty, whereby women around the world
tend to be more impoverished than men.
10. As middle-income nations have been required to make payments on their debts, the
requisite structural adjustments have necessitated that the countries make spending cuts
in areas that formally helped some of the poor, including subsidized food, education, and
health care.
11. Nations with high-income economies continue to dominate the world economy, despite
capital flight (the movement of jobs and economic resources from one nation to another)
and deindustrialization (closing plants and factories because of their obsolescence or the
fact that workers in other nations are being hired to do the work more cheaply).
12. South to south migrants consist of people who have moved from one developing nation
to another.
13. Research shows that migrants from a poor country to a less poor one are better off
economically than those who move from lower-income to higher-income nations.
Rejoinder: Rather than being better off, they are actually worse off.
14. According to social scientists, absolute poverty exists when people may be able to afford
basic necessities but are still unable to maintain an average standard of living; it is
measured by comparing the actual income against the income earner’s expectations and
perceptions.
Rejoinder: Absolute poverty is a condition in which people do not have the means to
secure the most basic necessities of life and it is measured by comparing personal or
household income or expenses with the cost of buying a given quantity of goods and
services; relative poverty exists when people are able to afford basic necessities but are
still unable to maintain an average standard of living, it is measured by comparing one
person’s income with the incomes of others; and subjective poverty would be measured
by comparing the actual income against the income earner’s expectations and potential.
15. In 1990 the United Nations Development Program introduced the Human
Development Index (HDI), establishing three new criteria—in addition to gross domestic
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Global Stratification
product (GDP) —for measuring the level of development in a country: life expectancy,
health, and education.
16. The average life expectancy at birth of people in middle-income countries remains about
12 years less than that of people in high-income countries; moreover, the life expectancy
of people in low-income countries is as much as 23 years less than that of people in high-
income countries.
17. According to the United Nations, women constitute about 40 percent of those who are
illiterate. Literacy is crucial for women because it has been closely linked to increases in
fertility, improved child health, and decreased earnings potential.
Rejoinder: Women actually constitute about two-thirds (67 percent) of those who are
illiterate. Literacy is crucial for women because it has been closely linked to decreases in
fertility, improved child health, and increased earnings potential.
18. Analysts using a development framework typically view industrialization and economic
development as essential steps that nations must go through in order to reduce poverty
and increase life chances for their citizens.
19. According to the dependency theory, the high-income, more-developed nations can
improve their standard of living only with a period of intensive economic growth and
accompanying changes in people’s beliefs, values, and attitudes toward work.
Rejoinder: The correct response is the modernization theory and it involves the low-
income, less-developed nations.
20. U.S. President John F. Kennedy’s economic advisor Walt W. Rostow suggested that all
countries go through four stages of economic development. He stated that the second
stage is the take-off stage—a period of economic growth accompanied by a growing
belief in individualism, competition, and achievement.
21. The new international division of labor theory states that the poorer nations are trapped in
a cycle of structural dependency on the richer nations due to their need for infusions of
foreign capital and external markets for their raw materials.
Rejoinder: The correct response is the dependency theory which also states that global
poverty can at least partially be attributed to the fact that the low-income countries have
been exploited by the high-income countries.
22. According to sociologist Immanuel Wallerstein’s world systems theory, the capitalist world
economy is a global system divided into a hierarchy of three major types of nations in
which upward or downward mobility is conditioned by the resources and obstacles that
characterize the international system.
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23. Most low-income countries in Africa and South America are core nations that are
dependent on peripheral nations for capital, have little or no industrialization, and have
uneven patterns of urbanization.
Rejoinder: The correct response is peripheral nations are dependent on core nations for
capital. Core nations are dominant capitalist centers characterized by high levels of
industrialization and urbanization. Core nations such as the United States, Japan, and
Germany possess most of the world’s capital and technology.
24. According to the new international division of labor theory, commodity production is being
split into fragments that can be assigned to whichever part of the world can provide the
most profitable combination of capital and labor.
25. Buyer-driven commodity chains is the term used to describe industries in which
transnational corporations play a central part in controlling the production process.
Industries that produce automobiles, computers, and other capital- and technology-
intensive products are examples.
Answer: Global stratification refers to the unequal distribution of wealth, power, and
prestige on a global basis, resulting in people having vastly different lifestyles and life
chances both within and among the nations of the world. The world is divided into
unequal segments characterized by extreme differences in wealth and poverty. High-
income countries are nations characterized by highly industrialized economies,
technologically advanced industrial, administrative, and service occupations; and
relatively high levels of national and per capita (per person) income. In contrast, middle-
income countries are nations with industrializing economies, particularly in urban areas
and moderate levels of national and personal income. Low-income countries are primarily
agrarian nations with little industrialization and low levels of national and personal
income. Just as the differences between the richest and poorest people in the world have
increased, the gap in global income differences between rich and poor countries has
continued to widen over the past fifty years. In 1960, the wealthiest 20 percent of the
world population had more than thirty times the income of the poorest 20 percent. By
2000, the wealthiest 20 percent of the world population had almost eighty times the
income of the poorest 20 percent.
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2. Describe the “three worlds” approach that is used to classify nations of the world.
Answer: After World War II, the “three worlds” approach was introduced by social
analysts to distinguish among nations on the basis of their levels of economic
development and the standard of living of their citizens. First World nations were said to
consist of the rich, industrialized nations that primarily had capitalist economic systems
and democratic political systems. The most frequently noted First World nations were the
United States, Canada, Japan, Great Britain, Australia, and New Zealand. Second World
nations were said to be countries with at least a moderate level of economic development
and a moderate standard of living. These nations included China, North Korea, Vietnam,
Cuba, and portions of the former Soviet Union. Third World nations are the poorest
countries, with little or no industrialization and the lowest standards of living, shortest life
expectancies, and highest rates of mortality.
3. Explain the levels of development approach used for describing global stratification.
Answer: Following World War II, the concepts of underdevelopment and underdeveloped
nations emerged out of the Marshall Plan, which provided massive sums of money in
direct aid and loans to rebuild the European economic base destroyed in World War II.
Given the Marshall Plan’s success in rebuilding much of Europe, U.S. political leaders
decided that the Southern Hemisphere nations that had recently been released from
European colonialism could also benefit from a massive financial infusion and rapid
economic development. Leaders of the developed nations argued that urgent problems
such as poverty, disease, and famine could be reduced through the transfer of finance,
technology, and experience from the developed nations to lesser-developed countries.
From this viewpoint, economic development is the primary way to solve the poverty
problem. Ideas regarding underdevelopment were popularized by President Harry S.
Truman in his 1949 inaugural address. According to Truman, the nations in the Southern
Hemisphere were “underdeveloped areas” because of their low gross national product,
which today is referred to as gross national income (GNI) – a term that refers to all the
goods and services produced in a country in a given year, plus the net income earned
outside the country by individuals or corporations. If nations could increase their GNI,
then social and economic inequality among the citizens within the country could also be
reduced. Accordingly, Truman believed that it was necessary to assist the people of
economically underdeveloped areas to raise their standard of living, by which he meant
material well-being that can be measured by the quality of goods and services that may
be purchased by the per capita national income. After several decades of economic
development fostered by organizations such as the United Nations and the World Bank, it
became apparent by the 1970s that improving a country’s GNI did not tend to reduce the
poverty of the poorest people in that country. In fact, global poverty and inequality were
increasing, and the initial optimism of a speedy end to underdevelopment faded.
Answer: About half of the world’s population lives in the sixty-one low-income
economies, where most people engage in agricultural pursuits, reside in nonurban areas
and are impoverished. The World Bank identifies low-income economies as having a GNI
per capita of $765 or less in 2003. Low-income economies are primarily found in
countries in Asia and Africa, where half of the world’s population resides. In some of
these nations, civil war is both a cause and a product of the poverty in which much of the
population lives. Among those most affected by poverty in low-income economies are
women and children. Many poor women worldwide also do not have access to
commercial credit and have been trained only in traditionally female skills that produce
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wages. These factors have contributed to the global feminization of poverty, whereby
women around the world tend to be more impoverished than men.
5. What is south to south and south to north migration? What are the typical characteristics
of people who move from one poor nation to a slightly less poor one?
Answer: South to south migration is the movement of people from one developing nation
to another. South to north migration is the movement from a lower-income nation to a
country with a high-income economy. South to south migrants are often poorer than
those who migrate from lower-income to high-income nations. South to south migrants
are also more likely to travel without proper documentation. They are also more
vulnerable to unscrupulous people. Many send money back home to family members
who typically live in remote rural areas.
Answer: About one-third of the world’s population resided in the ninety-three nations with
middle-income economies. The World Bank divides middle-income economies into lower-
middle-income ($766 to $3,035 in 2003) and upper-middle-income ($3,036 to $9,385 in
2003). According to the World Bank, some nations have been more successful than
others in implementing key elements of change and bringing about a higher standard of
living for their citizens. Among other factors, high rates of inflation, the growing gap
between the rich and the poor, low life-expectancy rates, and homeless children have
been visible signs of problems in the transition toward a free market economy in
countries such as the United States. As compared with lower-middle-income economies,
nations having upper-middle-income economies typically have a somewhat higher
standard of living and export diverse goods and services, ranging from manufactured
goods to raw materials and fuels. As middle-income nations have been required to make
payments on their debts, the requisite structural adjustments have necessitated that the
countries make spending cuts in areas that formerly helped some of the poor, including
subsidized food, education, and health care.
Answer: The World Bank states that high-income economies have a GNI per capita of
more than $9,385 in 2003. High-income economies are found in fifty-four nations.
According to the World Bank, people in high-income economies typically have a higher
standard of living and continue to dominant the world economy, despite the fact that
some workers found themselves without work due to capital flight—movement of jobs
and economic resources from one nation to another—and deindustrialization—closing
plants and factories because of their obsolescence or that workers from other nations are
being hired to do the work more cheaply.
8. In relation to measuring global wealth and poverty, distinguish among absolute, relative,
and subjective poverty.
Answer: Although gross national income (GNI) continues to be one of the most widely
used measures of national income, in recent years the United Nations and the World
Bank have begun to use the gross domestic product (GDP). The gross domestic product
is all the goods and services produced within a country’s economy during a given year.
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Unlike the GNL, the GDP does not include any income earned by individuals or
corporations if the revenue comes from sources outside of the country. According to
social scientists, defining poverty involves more than comparisons of personal or
household income: It also involves social judgments made by researchers. From this
point of view, absolute poverty—previously defined as a condition in which people do not
have the means to secure the most basic necessities of life—would be measured by
comparing personal or household income or expenses with the cost of buying a given
quantity of goods and services. The World Bank has defined absolute poverty as living on
less than a dollar a day. Similarly, relative poverty—which exists when people may be
able to afford basic necessities but are still unable to maintain an average standard of
living—would be measured by comparing one person’s income with the incomes of
others. Finally, subjective poverty would be measured by comparing the actual income
against the income earner’s expectations and perceptions. Defining levels of poverty
involves several dimensions: (1) how many people are poor, (2) how far below the
poverty line people’s incomes fall, and (3) how long they have poor (is the poverty
temporary or long term?)
9. Identify and explain the use of the Gini coefficient and global quality of life issues.
Answer: The World Bank uses as its measure of income inequality what is known as the
Gini coefficient, which ranges from zero (meaning that everyone has the same income) to
100 (one person receives all the income). Using this measure, the World Bank has
concluded that inequality has increased in nations such as Bulgaria, the Baltic countries,
and the Slavic countries of the former Soviet Union to levels similar to those in the less-
equal industrial market economies, such as the United States. Stark contrasts also exist
in countries such as India, where abject poverty still exists side by side with lavish
opulence in Calcutta. It is estimated that 652 million of Asia’s people are poor and that
448 million of them live in India alone. Similar disparities between the rich and the poor
can be seen in other nations.
10. Discuss global poverty and its effects upon human development issues of life
expectancy, health, and education.
Answer: In 1990 the United Nations Development Program introduced the Human
Development Index (HDI), establishing three new criteria—in addition to GDP—for
measuring the level of development in a country: life expectancy, education, and living
standards. According to the United Nations, human development is the process of
“expanding choices that people have in life, to lead a life to its full potential and in dignity,
through expanding capabilities and through people taking action themselves to improve
their lives.” Regarding life expectancy, on the plus side, average life expectancy has
increased by about a third in the past three decades and is now more than 70 years in 87
countries. On a less positive note, the average life expectancy at birth of people in
middle-income countries remains about 12 years less than that of people in high-income
countries. Moreover, the life expectancy of people in low-income nations is as much as
23 years less than that of people in high-income nations. One major cause of shorter life
expectancy in lower-income nations is the high rate of infant mortality. The infant
mortality rate (deaths per thousand live births) is more than eight times higher in low-
income countries than in high-income countries. Low-income countries typically have
higher rates of illness and disease, and they do not have adequate health care facilities.
Malnutrition is a common problem among children, many of whom are underweight,
stunted, and have anemia—a nutritional deficiency with serious consequences for child
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Answer: Global wealth and poverty are linked to the level of industrialization and
economic development in a given society. Although the process by which a nation
industrializes may vary somewhat, industrialization almost inevitably brings with it a
higher standard of living in a nation and some degree of social mobility for individual
participants in the society. As societies industrialize, they also urbanize as workers locate
their residents near factories, offices, and other places of work. Analysts using a
development framework typically view industrialization and economic development as
essential steps that nations must go through in order to reduce poverty and increase life
chances for their citizens. The most widely known development theory is modernization
theory—a perspective that links global inequality to different levels of economic
development and suggests that low-income economies can move to middle- and high-
income economies by achieving self-sustained economic growth. According to
modernization theory, the low-income, less-developed nations can improve their standard
of living only with a period of intensive economic growth and accompanying changes in
people’s beliefs, values, and attitudes toward work. As a result of modernization, the
values of people in developing countries supposedly become more similar to those of
people in high-income nations. The number of hours that people work at their jobs each
week is one measure of the extent to which individuals subscribe to the work ethic, a core
value widely believed to be of great significance in the modernization process.
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subscribe to the work ethic, and save very little money. The second stage is the take-off
stage—a period of economic growth accompanied by a growing belief in individualism,
competition, and achievement. During this stage, people start to look toward the future, to
save and invest money, and to discard traditional values. According to Rostow’s
modernization theory, the development of capitalism is essential for the transformation
from a traditional, simple society to a modern, complex one. In the third stage, the
country moves toward technological maturity. At this point, the country will improve its
technology, reinvest in new industries, and embrace the beliefs, values, and social
institutions of the high-income, developed nations. In the fourth stage, the country
reaches the phase of high mass consumption and a correspondingly high standard of
living.
Answer: The dependency theory states that global poverty can at least partially be
attributed to the fact that the low-income countries have been exploited by the high-
income countries. Dependency theorists see the greed of the rich countries as a source
of increasing impoverishment of the poorer nations and their people. Dependency theory
disputes the notion of the development approach, and modernization theory specifically,
that economic growth is the key to meeting important human needs in societies. In
contrast, the poorer nations are trapped in a cycle of structural dependency on the richer
nations due to their need for infusions of foreign capital and external markers for their raw
materials, making it impossible for the poorer nations to pursue their own economic and
human development agendas. Dependency theory has been most often applied to the
newly industrializing countries (NICs) of Latin America. Dependency theory makes a
positive contribution to our understanding of global poverty by noting that
“underdevelopment” is not necessarily the cause of inequality. Rather, it points out that
exploitation not only of one country by another but of countries by transnational
corporations may limit or retard economic growth and human developments in some
nations.
14. Summarize sociologist Immanuel Wallerstein’s world systems theory of global inequality.
Answer: World systems theory suggests that what exists under capitalism is a truly
global system that is held together by economic ties. From this approach, global
inequality does not emerge solely as a result of the exploitation of one country by
another. Instead, economic domination involves a complex world system in which the
industrialized, high-income nations benefit from other nations and exploit their citizens.
This theory is most closely associated with sociologist Immanuel Wallerstein, who
believed that a country’s mode of incorporation into the capitalistic work economy is the
key feature in determining how economic development takes place in that nation.
According to world systems theory, the capitalist world economy is a global system
divided into a hierarchy of three major types of nations—core, semiperipheral, and
peripheral—in which upward or downward mobility is conditioned by the resources and
obstacles that characterize the international system. Core nations are dominant capitalist
centers characterized by high levels of industrialization and urbanization. Core nations
such as the United States, Japan, and Germany posses most of the world’s capital and
technology. Even more importantly for their position of domination, they exert massive
control over world trade and economic agreements across national boundaries.
Semiperipheral nations are more developed than peripheral nations but less developed
than core nations. Nations in this category typically provide labor and raw materials to
core nations within the world system. These nations constitute a midpoint between the
core and peripheral nations that promotes the stability and legitimacy of the three-tiered
world economy. These nations include South Korea and Taiwan in East Asia, Mexico and
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Brazil in Latin America, India in South Asia, and Nigeria and South Africa in Africa. Most
low-income countries in Africa, South America, and the Caribbean are peripheral
nations—nations that are dependent on core nations for capital, have little or no
industrialization (other than what may be brought in by core nations) and have uneven
patterns of urbanization. According to Wallerstein, the wealthy in peripheral nations
benefit from the labor of poor workers and from their own economic relations with core
nation capitalists, whom they uphold in order to maintain their own wealth and position.
15. Explain the new international division of labor theory and compare the use of global
commodity chains.
ESSAY SECTION
1. Summarize wealth and poverty from a global perspective.
The following are suggested areas for students to address in the essay:
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Encourage students to provide any personal experience with low-income and/or middle-
income countries in their responses
The following are suggested areas for students to address in the essay:
Define gross national income (GNI) and explain how it affects development
Encourage students to provide any personal experience with any of the “Worlds” in their
responses
3. Discuss the issue of migration of people from one poor country to another. Do their
efforts make a difference in their economic status? Will this kind of migration continue in
the future?
The following are suggested areas for students to address in the essay:
Discuss the typical characteristics of people who move from one poor nation to a slightly
less poor one
Discuss the belief that south to south migration will continue to increase
The following are suggested areas for students to address in the essay:
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Encourage students to provide any personal experience with any of income economies in
their responses
The following are suggested areas for students to address in the essay:
Encourage students to provide any personal experience with any of the types of poverty
in their responses
The following are suggested areas for students to address in the essay:
Describe what the United Nations could do to increase life expectancy around the world
Discuss what the United Nations could do to improve health around the world
Detail what the United Nations could do to improve education and promote literacy
around the world
The following are suggested areas for students to address in the essay:
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The following are suggested areas for students to address in the essay:
Encourage students to include any personal views on the dependency theory in their
responses
The following are suggested areas for students to address in the essay:
Encourage students to include any personal views on the world systems theory in their
responses
10. Describe global inequality in relation to the new international division of labor theory.
The following are suggested areas for students to address in the essay:
Encourage students to include any personal views on the new international division of
labor theory in their responses
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