| Why is Economic Growth easy to Define, but not Economic Development? | -Econ Growth just is an Increase in the size of the nation's GDP
-Econ Development is a Normative Concept and requires Value Judgements on what would make a more Developed Nation. The Aim is to Measure how Living Standards and Peoples General Welfare Changes over Time |
| What would be important factors when considering an Economy's Development? | -The size of an Economy - GDP per Capita
-Health and Size of Population
-Education in the Workforce
-Quality of Life in the Nation |
| How could Measuring Development assess Economic Growth? | -Economic Growth may be assessed on the Effect it has on People's Lives. For example:
-Economic Growth that leads to Lots of Pollution would be Less Beneficial than the same amount of Economic Growth but with No Pollution
-Economic Growth that Improves the Lives of a Large Part of the Population (Infrastructure for Water connections) would be seen as Positive. |
| Why does Economic Development use GDP per Capita or GNI per Capita | -This gives an Important Indication of People's Standard of Living
-Generally speaking, Higher GDP / GNI per capita figures have Higher Standards of Living |
| Why may using GDP / GNI Per Capita figures distort Economic Development? | -National Income Data will not give out a lot of 'Quality of Life' Factors like Leisure Time people have or their Health
-National Income data ignores Economic Welfare brought via the Hidden Economy, which is an Activity not recorded by the Government. this can be a huge Chunk in some Developing Nations' economies found in Latin America, and Sub-Saharan Africa. |
| What is the Genuine Progress Indicator and why is it useful?
-Are there any downsides? | -The GPI tries to give a Fuller Picture of the Effects of Growth than GDP
-It factors GDP in, but also factors the Negative Effects of Growth - Pollution, Child Labour - and also activities that Affects the Quality of Life which GDP doesn't include - Volunteering
-GPI is thus Useful for Policy Makers to Increase Overall Welfare, not just GDP. Though it is hard to put a Value or Cost on Volunteering, Pollution etc, so Value Opinions will have to be used
-The United States, Canada, Japan, Brazil and more have used the GPI |
| What is the HDI?
-What would it Include? | -The United Nations Human Development Index (HDI) attempts to Describe People's Welfare and a Nation's Economic Development which Advances looking at National Income Figures
-Factors in People's Health (Life Expectancy) Education (Years of Schooling) and Standard of Living (Real GNI per Capita, adjusted for PPP)
-Of course, it wouldn't contain All Information relevant to People's Welfare/Economic Development - but places Greater Emphasis on Quality of Life of a Nation's People |
| How do the Rankings of the HDI work? | -It can be ranked from those Most Developed to Least Developed, or to Assess the General Level of Development
-Above 0.8 symbolises a High Level of Human Development, while Below 0.5 is seen as Low Human Development
-2 Nations can get Similar HDI in Different Ways. One may have a High Life Expectancy and Poor education, while another has the Opposite! |
| Why is Extreme Inequality bad for
1. Developing Nations
2. Developed Nations | 1. Those who have Little Wealth and Income will suffer Hardship, if Circumstances Change (Natural Disasters)
2. While Fewer are in Absolute Poverty, Many more will be in Relative Poverty or be Socially Excluded. They may not be able to access the Opportunities to be a Participant in the Economy. |
| Is Inequality an Inevitable Consequence of Economic Development? | -Some people will always do better is what some others say.
-Inequality may even be necessary for Capitalism to just Function Properly because it strives for Entrepreneurship and Innovation.
-However, it depends on how a Nation develops its Economy. Going down a Path of Nationalisation, Social Welfare, redistribution may not lead to Inequality. |
| Why can it be Argued that Inequality slows down Economic Development? | -The poorest within a nation will find it difficult to start up a Firm, due to the lack of Resources to Invest. They probably can't Save, have a Lack of Assets (for Collateral) making it hard for Loans, and thus have a Weak Banking System
-Those with Higher Incomes may spend a Lot on Imports, or Invest Abroad. The money thus Leaks out of the Nation.
-Inequality has been Linked with Social Problems like Higher Crime or Health Problems |
| What are the Important Factors that Cause Inequality? | -Wage and Tax Levels
-Unemployment Levels
-Education Levels
-Property Ownership and Inheritance Laws
-Levels of Government Benefits |
| What is the Lorenz Curve? | -The Lorenz Curve, in a Diagram with the Y Axis= Cumulative % of Income and X Axis= Cumulative % of Population, is the Line a Nation takes
-A Straight Line represents Total Equality, while a 'Saggier' Curve represents Inequality - A greater Share of Income goes to a Relatively Small Number of People. |
| What is the Gini Coefficient | -The Gini Coefficient is measured from 0 (All Earn the Same) and 1 (One Person gets All the nation's Income)
G=A/(A+B) |
