Growth vs. Development Theory PDF

Growth vs. Development Theory Economic Growth: Measures the value of goods and services produced over a time period. Focuses on numerical indicators like GDP. Economic Development: Measures human welfare, including health, education, and income distribution. Holistic;...

Growth vs. Development Theory Economic Growth: Measures the value of goods and services produced over a time period. Focuses on numerical indicators like GDP. Economic Development: Measures human welfare, including health, education, and income distribution. Holistic; includes the Human Development Index (HDI). The Poverty Cycle The Poverty Cycle describes how poverty persists across generations: 1. Low Income: Limited ability to afford education and healthcare. 2. Low Productivity: Poor health and education reduce workforce efficiency. 3. Low Economic Growth: Lack of resources for investments perpetuates poverty. Breaking the cycle requires investments in education, healthcare, and infrastructure. Patterns in Growth/Development (Choropleth Maps) Choropleth maps show development patterns through colors, indicating: ○ Income levels. ○ Access to resources. ○ Population density and urbanization. LEDCs (Less Economically Developed Countries) exhibit disparities due to colonial history, resource availability, and infrastructure. The Four Factors of Production 1. Land: Natural resources (e.g., minerals, forests). 2. Labor: Human workforce. 3. Capital: Machinery, buildings, tools. 4. Entrepreneurship: Innovation and risk-taking. These factors interact to produce goods and services, with productivity influenced by investment and education. Externalities of Production and Consumption Positive Externalities:  Production: A factory installing renewable energy benefits society by reducing pollution. Consumption: Vaccinations improve public health beyond the vaccinated individual. Negative Externalities: Production: Factories emitting CO₂ cause global warming. Consumption: Smoking increases healthcare costs for society. Governments use taxes, subsidies, and regulations to manage these externalities. Would you like detailed examples or strategies to answer specific types of questions? Poverty vs. Absolute Poverty Poverty General state where individuals face disadvantages like low income, poor housing, inadequate health care, and limited access to education and employment. Often leads to social exclusion and restriction of fundamental rights. Absolute Poverty Defined by the inability to meet basic needs such as food, clothing, and shelter. A person in absolute poverty earns below the level required for basic survival. Example: Living on less than $2.15/day (World Bank definition for international poverty line). Relative Poverty Measures income inequality within a society. Defined as having income below 60% of a country’s median income. More context-specific and reflects standards of living in a particular society. Key Differences: Absolute Poverty focuses on survival needs; the threshold is fixed globally. Relative Poverty is comparative, reflecting societal disparities. Would you like help summarizing this into a concise answer for your test? Here are the key definitions related to the topics you're studying: Economic Development  Economic Development: The process by which a country improves the economic, political, and social well-being of its people, including increases in income, education, and healthcare. Standard of Living: The level of wealth, comfort, material goods, and necessities available to a person or community. Human Development Index (HDI): A measure of a country's average achievements in three basic dimensions of human development: health (life expectancy), education (years of schooling), and standard of living (GNI per capita). Economic Growth Economic Growth: An increase in the value of goods and services produced by an economy over time, usually measured by the change in Gross Domestic Product (GDP). Gross Domestic Product (GDP): The total value of all goods and services produced within a country’s borders in a given time period. Purchasing Power Parity (PPP): A theory that allows for the comparison of economic productivity and standards of living between countries by taking into account the relative cost of living and inflation rates. The Poverty Cycle Poverty Cycle: A self-perpetuating cycle where low income leads to low investment in health and education, which further leads to low productivity, sustaining poverty over generations. Dependency Burden: The ratio of the non-working population (children and elderly) to the working-age population, which can affect economic productivity. Factors of Production Land: All natural resources used in the production of goods and services (e.g., minerals, water, land itself). Labor: The human effort used in the creation of goods and services, including both physical and intellectual effort. Capital: Physical assets like machinery, buildings, and infrastructure that are used to produce goods and services. Entrepreneurship: The ability to innovate and take risks in the creation of new products or businesses. Externalities Externality: A side effect or consequence of an industrial or commercial activity that affects other parties who did not choose to be involved in that activity. Positive Externality: A beneficial side effect experienced by others (e.g., vaccination reducing disease spread).  Negative Externality: A harmful side effect that affects others (e.g., pollution from a factory affecting the health of nearby residents). Poverty Poverty: A condition where individuals or communities lack the financial resources to meet basic living standards, which include housing, food, education, and healthcare. Absolute Poverty: A state in which individuals are unable to meet the minimum required for survival (e.g., below the international poverty line, such as earning less than $2.15/day). Relative Poverty: Poverty defined in relation to the standards of living within a society. It refers to those who are significantly worse off than the average person in their community (e.g., income below 60% of the median income). Social Exclusion: The process by which individuals or entire communities are excluded from basic services and opportunities, often due to poverty. These definitions should help you with the key terms in your revision. Would you like me to help with any specific topic or question types for the assessment?