Economic Growth and Development Quiz

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Questions and Answers

What is considered a positive externality?

Pollution from a factory affecting health

Vaccination reducing disease spread (correct)

Traffic congestion caused by new infrastructure

High unemployment leading to increased crime

Which of the following describes entrepreneurship?

The ability to innovate and take risks (correct)

The process of acquiring physical assets

A state of economic inequality

The management of existing businesses

What is absolute poverty?

A relative measure of financial insecurity

Inability to meet survival needs like food and shelter (correct)

Lack of access to luxury goods and services

Income below 60% of the median income

Which factor is NOT associated with social exclusion?

High levels of community engagement Signup and view all the answers

Relative poverty is defined based on which criteria?

Comparative standards of living within a society Signup and view all the answers

What is the primary focus of economic growth compared to economic development?

Numerical indicators like GDP Signup and view all the answers

How does the Poverty Cycle describe the persistence of poverty across generations?

Low productivity results from poor health and education. Signup and view all the answers

What information do choropleth maps typically convey regarding development patterns?

Income levels and access to resources Signup and view all the answers

Which of the following is NOT one of the four factors of production?

Technology Signup and view all the answers

What is a positive externality of production?

Renewable energy reducing pollution Signup and view all the answers

What distinguishes absolute poverty from general poverty?

Absolute poverty is defined by the inability to meet basic needs. Signup and view all the answers

Which of the following factors influences the productivity of the four factors of production?

Investment in education and technology Signup and view all the answers

Which of the following is a characteristic of Less Economically Developed Countries (LEDCs)?

Post-colonial challenges and resource disparities Signup and view all the answers

What is a characteristic of Absolute Poverty?

Focuses on survival needs with a fixed global threshold Signup and view all the answers

How is Relative Poverty defined?

Income below 60% of a country’s median income Signup and view all the answers

Which of the following is NOT a dimension of the Human Development Index (HDI)?

Economic growth rate Signup and view all the answers

What does Purchasing Power Parity (PPP) allow for?

Comparison of economic productivity and living standards Signup and view all the answers

Which of the following best describes Economic Development?

Improvements in economic, political, and social well-being Signup and view all the answers

What does the Poverty Cycle illustrate?

The relationship between income and investment in health and education Signup and view all the answers

Which component represents the Dependency Burden?

The ratio of non-working population to working-age population Signup and view all the answers

Which is a factor of production that refers to natural resources?

Land Signup and view all the answers

Study Notes

Economic Growth vs. Development

Economic Growth measures the value of goods and services produced over a period, focusing on indicators like GDP.
Economic Development measures human welfare, encompassing health, education, and income distribution; uses the Human Development Index (HDI).

The Poverty Cycle

The Poverty Cycle describes how poverty persists across generations. Factors include:
- Low Income: Limited ability to afford essentials like education and healthcare.
- Low Productivity: Poor health and education reduce workforce efficiency.
- Low Economic Growth: Lack of resources hinders investments, perpetuating poverty.
Breaking the cycle requires investments in education, healthcare, and infrastructure.

Patterns in Growth/Development (Choropleth Maps)

Choropleth maps illustrate development patterns visually, using colors to indicate:
- Income levels.
- Access to resources.
- Population density and urbanization.
Less Economically Developed Countries (LEDCs) often show disparities due to historical factors (e.g., colonial history), resource availability, and infrastructure.

Four Factors of Production

Land: Natural resources (minerals, forests).
Labor: The human workforce.
Capital: Machinery, buildings, tools.
Entrepreneurship: Innovation and risk-taking.
These interact to produce goods and services, with productivity influenced by investment and education.

Externalities of Production and Consumption

Positive Externalities: Benefits extend beyond the immediate producer/consumer:
- Production: Factories using renewable energy improve air quality (benefits nearby community).
- Consumption: Vaccinations improve public health for the entire community.
Negative Externalities: Costs extend beyond the immediate producer/consumer:
- Production: Factories emitting CO2 cause global warming (impacts entire planet).
- Consumption: Smoking increases healthcare costs for society (impacts health system).

Poverty

Poverty: General state where individuals experience disadvantages, including low income, poor housing, and inadequate healthcare. This can cause social exclusion and limit access to fundamental rights.
Absolute Poverty: Defined by inability to meet basic needs (food, clothing, shelter). Usually measured against a specific monetary threshold (e.g., less than $2.15/day).
Relative Poverty: Measures income inequality within a society by comparing incomes to the median income in that country. An income less than 60% of the country's median income is considered relatively low.

Economic Development

A process that improves a nation's economic, political, and social well-being.
Standard of Living: Level of wealth, comfort, material goods, and necessities available to a person or community.
Human Development Index (HDI): Measures a country's achievements in health (life expectancy), education (years of schooling), and standard of living (GNI per capita).

Factors of Production

Land: All natural resources used in production.
Labor: The human effort expended in production.
Capital: Physical assets (machinery, buildings, infrastructure) used in production.
Entrepreneurship: The ability to innovate and take risks in creating new products or businesses.

Externalities

Externality: A side effect of an action affecting parties not directly involved.
Positive Externality: Benefits experienced by others. Example: vaccinations reducing the spread of a disease.
Negative Externality: Costs imposed on others. Example: factory pollution harming nearby residents.

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Description

Test your knowledge on the concepts of economic growth and development. This quiz explores how these two elements differ, the implications of the poverty cycle, and the use of choropleth maps to visualize economic patterns. Understand the key indicators and measures that define growth and development in different regions.