Economics: Measuring Well-being and Development

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Questions and Answers

What is the definition of wellbeing?

The state of being comfortable, happy or healthy, having what you need to live a good and dignified life.

What is the main global method to measure development?

GDP (Gross Domestic Production) per capita.

What is the difference between qualitative and quantitative indicators?

Qualitative indicators are based on written or spoken narratives, while quantitative indicators are based on numbers and mathematical calculations.

What does the Human Development Index (HDI) measure?

HDI measures life expectancy, education, and income index. Signup and view all the answers

What is the main difference between a More Economically Developed Country (MEDC) and a Less Economically Developed Country (LEDC)?

MEDC has a higher standard of living, more advanced industrial infrastructure, and a higher GDP, while LEDC has a lower standard of living, less advanced economy, and a lower GDP. Signup and view all the answers

What is a Newly Industrialised Country (NIC)?

A country undergoing rapid modernisation and economic growth. Signup and view all the answers

What is the definition of poverty?

An economic state where an individual does not have the money nor material possessions to sustain their basic needs. Signup and view all the answers

What does the Happy Planet Index (HPI) measure?

HPI measures experienced wellbeing, life expectancy, ecological footprint, and inequality. Signup and view all the answers

What is the main difference between absolute poverty and relative poverty?

Absolute poverty is the scarcity of material possessions or money to meet basic personal needs, whereas relative poverty is the number of people who earn less than the median income of the local population. Signup and view all the answers

What is the poverty cycle, and how can it be broken?

The poverty cycle is a set of factors that perpetuate poverty unless there is an outside intervention. It can be broken through external intervention. Signup and view all the answers

What is the difference between situational poverty and generational poverty?

Situational poverty is traced to a single incident within the lifetime (e.g.losing a job, natural disaster or illness), whereas generational poverty is passed on from generation to generation through the cycle. Signup and view all the answers

What is correlation, and what are the three types of correlation?

Correlation is the existence of a relationship between two sets of data. The three types of correlation are positive correlation, negative correlation, and no correlation. Signup and view all the answers

What is the main difference between extreme poverty and absolute poverty?

Extreme poverty is living on less than $1.90 USD a day, whereas absolute poverty is the scarcity of material possessions or money to meet basic personal needs. Signup and view all the answers

What are some of the casual factors that can contribute to poverty?

Some of the casual factors that can contribute to poverty are poor health, lack of education, social and income inequality, underdevelopment, conflict, corruption, and natural disasters. Signup and view all the answers

Study Notes

Wellbeing

Wellbeing refers to the state of being comfortable, happy, or healthy, having what one needs to live a good and dignified life.

Measures of Wellbeing

GPD (Gross Domestic Product) per capita is the main global method to measure development, which is the total value of all goods and services produced in a country over one year.

Measuring Indicators

Indicators are measures used to measure people's living conditions and wellbeing, which can be qualitative (soft) or quantitative (hard).
Qualitative indicators are measured through written or spoken narratives, which are subjective, process-oriented, and non-standardized.
Quantitative indicators are measured through numbers and mathematical calculations, which are focused, objective, outcome-oriented, standardized, and numeral.

Types of Indicators

Indicators can be categorized, and examples include HDI (Human Development Index) and HPI (Happy Planet Index).
HDI combines life expectancy index (health), education index (knowledge), and income index (standard of living).
HPI combines ecological footprint – environmental efficiency, experienced wellbeing, life expectancy, and inequality.

Developed and Developing Countries

MEDC (More Economically Developed Country) has a higher standard of living, advanced industrial infrastructure, and a higher GDP.
LEDC (Less Economically Developed Country) has a lower standard of living, less advanced economy, and a lower GDP.
NIC (Newly Industrialised Country) is a country undergoing rapid modernization and economic growth.
EE (Emerging Economy) is a country undergoing rapid economic growth but still faces political, social, and monetary challenges.

Poverty

Poverty is an economic state where an individual lacks the money or material possessions to sustain their basic needs.
Absolute poverty is the scarcity of material possessions or money to meet basic personal needs.
Extreme poverty is living on less than $1.90 USD a day (or $2.50 AUD).
Relative poverty is the number of people who earn less than the median income of the local population.
Poverty can be caused by historical issues like slavery, and casual factors like poor health, lack of education, social and income inequality, underdevelopment, conflict, corruption, conquest, natural disasters, and inherited poverty (poverty cycle).

Poverty Cycle

The poverty cycle is a set of factors that allow poverty to continue unless there is an outside intervention.
Situational poverty and generational poverty are how people enter the cycle.
Generational poverty is passed on from generation to generation through the cycle.
Situational poverty is traced to a single incident within the lifetime (e.g., losing a job, natural disaster, or illness).

Correlation and Causation

Comparing sets of data helps to see what relationship exists between them (similar and different).
If a relationship exists, it's correlation (positive, negative, or no correlation).
Correlation does not mean causation.

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Description

This quiz covers the concept of wellbeing, measuring indicators, and the global method of measuring development using Gross Domestic Product (GDP) per capita.