Transport Economics Flashcards: Traditional vs. New Economic View

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Questions and Answers

What is the primary difference between economic growth and economic development?

Economic growth measures the value of output, while economic development measures the welfare of individuals. (correct)

Economic growth is concerned with increasing GDP, while economic development is only about improving living standards.

Economic growth is a measure of national income, while economic development focuses on income distribution.

Economic growth is a quantitative measure, while economic development is a qualitative measure.

Which of the following is a common limitation of using national income as a measure of economic growth?

It fails to account for the distribution of income across different segments of the population.

It does not consider the reliability and accuracy of the data used in its calculation.

It does not take into account the environmental impact of economic activities.

All of the above are limitations of using national income as a measure of economic growth. (correct)

What is the primary difference between Gross Domestic Product (GDP) and Gross National Product (GNP)?

GDP is calculated using the expenditure approach, while GNP is calculated using the income approach.

GDP measures the value of goods and services produced within a country, while GNP measures the value of goods and services produced by a country's citizens, regardless of location. (correct)

GDP includes only goods and services produced for final consumption, while GNP includes intermediate goods and services.

GDP is a measure of economic growth, while GNP is a measure of economic development.

Which of the following is a method used to measure national income?

All of the above Signup and view all the answers

Which of the following statements about the Gross National Income (GNI) of the Philippines is true?

The GNI of the Philippines has seen significant changes and fluctuations over the years. Signup and view all the answers

What is the Human Development Index (HDI)?

A composite index that measures a country's overall achievement in key dimensions of human development, including life expectancy, education, and income. Signup and view all the answers

What is the primary purpose of the Human Development Index (HDI)?

To compare the development levels of different countries Signup and view all the answers

Which sector of economic activity includes forestry and mining?

Primary Sector Signup and view all the answers

What dimension of human welfare does literacy rate reflect in the Human Development Index (HDI)?

Knowledge Signup and view all the answers

What is the main focus of sustainable development?

Balancing current needs with future generations' needs Signup and view all the answers

Which index serves as a composite indicator of socio-economic development?

Human Development Index (HDI) Signup and view all the answers

What does GDP per capita indicate in the context of the Human Development Index (HDI)?

Economic well-being of individuals Signup and view all the answers

Which sector of economic activity focuses on manufacturing and industrial processes?

Secondary Sector Signup and view all the answers

What does life expectancy primarily represent in the context of the Human Development Index (HDI)?

Health and well-being indicators Signup and view all the answers

What does access to education primarily indicate in the Human Development Index (HDI)?

Educational attainment and knowledge dimension Signup and view all the answers

In what way does Purchasing Power Parity (PPP) contribute to measuring human welfare?

It helps compare income levels across different countries fairly Signup and view all the answers

Study Notes

What is Economics?

Economics is the study of the production and consumption of goods, involving the transfer of wealth to produce and obtain those goods.
The objectives of economics include explaining how people interact within markets to achieve their goals and illuminating the reasons behind specific behaviors of individuals and governments.

Economic Development

Economic development refers to sustained, concerted actions by policymakers and communities to promote the standard of living and economic health in a specific area.
Areas of focus in economic development include:
- Developing human capital
- Critical infrastructure improvement
- Enhancing regional competitiveness
- Ensuring environmental sustainability
- Promoting social inclusion, health, safety, literacy, and other initiatives

Traditional View of Economic Development

The primary concern of traditional economic development is the efficient, least-cost allocation of scarce productive resources.
The focus is on optimal growth of resources over time, with the objective of producing an ever-expanding range of goods and services.
Core principles include efficiency in resource allocation and optimizing growth for continual expansion of economic output.

New Economic View of Development

Economic development includes improvements in material welfare, especially for those with the lowest incomes.
The focus is on eradicating mass poverty, addressing issues like illiteracy, diseases, and early death.
It involves changes in input and output composition, shifting from agricultural to industrial activities.
The goal is to organize the economy for general productive employment among the working-age population.

Growth vs. Development

Economic growth is a measure of the value of output of goods and services within a time period.
Economic development is a measure of the welfare of humans in a society.
Economic growth may be one aspect of economic development, but not the same.

Economic Growth

Measures of economic growth include:
- GDP (Gross Domestic Product)
- Income
- Expenditure
- Output
Economic growth may provide distorted pictures of the country's income level, failing to account for income distribution.
Wealth concentration among a small population may not reflect the majority's welfare.

Myths About Economic Growth

Economic growth is often incorrectly seen as an indicator of wealth, reflecting the quantity of available resources in society.
Economic growth does not provide insights into people's quality of life, including access to education, healthcare, employment, clean air, safe drinking water, and other factors.
Economic growth, while increasing a nation's total wealth, is not a guaranteed solution for reducing poverty and addressing other social problems.

Indicators of Economic Growth

National income is measured using economic performance indicators, such as GDP, income, expenditure, and output.
GDP is the value of output produced within a country during a specific time period.
There is a need for a standardized currency for accurate assessment, but challenges in determining which currency and at what value.

National Income - Problems with Using GDP/GNP

Black/Informal Economy: Unrecorded activities, such as subsistence farming and barter activities, are not officially recorded.
Illegal Activities: Certain economic activities, such as "cash in hand" building work and drug dealing, are conducted illegally.
Non-Monetary Contributions: Work performed without monetary compensation, such as charity work and housework, may not be officially considered but contributes to societal welfare.

Human Development Index

The Human Development Index (HDI) is a composite index to gauge socio-economic development.
The three dimensions of human welfare include:
- Longevity: Measurement of life expectancy
- Knowledge: Evaluation of access to education and literacy rates
- Standard of Living: Includes GDP per capita, often measured using Purchasing Power Parity (PPP)
Components of HDI include longevity, knowledge, and standard of living.

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Description

This quiz covers topics such as the traditional and new economic views of development, the difference between economic growth and development, and the relationship between economic growth and development.

Economics: Traditional vs. New Economic View