Name Date Period BEFORE YOU BEGIN. Looking at the Chapter. Economic Development: Less-developed countries (LDCs)
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1 ECONOMIC DEVELOPMENT BEFORE YOU BEGIN Looking at the Fill in the blank spaces with the missing words. Economic vs. Economic Less developed countries have relatively low or. Economic Development: Less-developed countries (LDCs) Low intake Conditions of many less developed countries High infant rates Inadequate services Poor drinking water Study Guide 184 NTC/Contemporary Publishing Group, Inc.
2 Make your own graphic organizers for these two sections and their main ideas. Obstacles to development High tax rates Political instability Cultural differences Low savings rates Rapid population growth High dependency ratio Factors that aid growth and development Technological advances Protecting private property Simple, easy business licensing Absence of wage and price controls Absence of controls on bank lending Free trade Lower taxation Stable, non-inflationary monetary policy Foreign investment Study Guide 185 NTC/Contemporary Publishing Group, Inc.
3 Outlining the Look over the chapter and pay attention to the main topics. As you look through each section, fill in the missing terms in the outline. I. Economic Development A. Economic versus economic 1. A country can experience economic but still not be considered economically. 2. Economic refers to a rise in the standard of living as measured by such things as paved roads, electricity, schools, indoor plumbing, more and higher-quality goods to buy, and so on. B. How countries are classified 1. A country (DC) has a relatively high GDP or GDP per capita. 2. A less-developed country (LDC) has a relatively GDP or GDP per capita. a. For example, the United States is a country and Ethiopia is a - country. b. There is considerable between the poorest of the poor and the richest of the rich. 1) In the late-1990s, the 10 poorest countries had an average per-capita GDP of $, while the 10 richest countries had an average per-capita GDP of $. c. For most of the 1990s, approximately people were living in poverty. percent of the people living in sub- Saharan Africa were living in poverty, as were percent of the people in Asia, percent in Latin America, and percent in North America and the Middle East. C. Conditions in many less developed countries 1. The mortality rate tends to be closely related to a country s per-capita GDP. a. mortality tends to be in less-developed countries than in developed countries. Study Guide 186 NTC/Contemporary Publishing Group, Inc.
4 b. India had an mortality rate of per 1,000 live births in the mid-to-late 1990s. The mortality rate in the United States was per 1,000 live births. c. Infant mortality rates average 11 (per 1,000 live births) in developed countries and 74 in less-developed countries. 2. intake of the average person tends to be lower in lessdeveloped countries than in developed countries. a. In the 1980s and early 1990s, more than percent of the population in Asia and Africa barely met basic calorie intake requirements. Millions of people who live in less-developed countries go to sleep hungry each night. 3. People living in less-developed countries often do not have safe or adequate. a. In less-developed countries, billion people did not have access to safe water, and billion people were without sanitation facilities, and of children die each year due to malnourishment and disease. II. Obstacles to Economic Development A. Rapid 1. growth rates are in LDCs than in developed countries. 2. The growth rate is equal to the birthrate minus the rate. 3. Causes of the relatively high population growth rate in the LDCs a. The tends to be higher than in LDCs. 1) In countries where pensions, Social Security, and the like do not exist, and where the economy revolves around agriculture, children are often seen as essential labor and as security for parents in their old age. b. In the past few decades in the LDCs, the rate has fallen, largely because of medical advances. c. The combination of higher and declining means population grows more rapidly in LDCs than in developed nations. 4. The ratio is the number of children under 15 years old plus the number of the elderly aged 65 and over divided by the total population. Dependency ratio = Number of children under 15 + Number of elderly 65 and over Population Study Guide 187 NTC/Contemporary Publishing Group, Inc.
5 a. Rapid population growth can stifle economic development because the dependency ratio. B. Low rate 1. Some economists argue that the LDCs have low rates because the people living there are so poor that they can t save. 2. This creates a vicious of : LDCs are poor because they can t save and buy goods, but they can t save and buy goods because they are poor. 3. Other economists argue that being poor is not a to economic development. They say that many nations that are rich today (such as the United States) were poor in the past but still managed to become economically developed. C. Cultural differences 1. Some cultures are reluctant to depart from the (existing state of affairs). They view change as dangerous and risky. 2. In some cultures, people believe that a person s good or bad fortune in life depends more on fate or their beliefs than on how hard the person works, or how much he or she learns, or how hard he or she strives to succeed. D. Political and government of private property. E. rates may affect economic development F. Thomas Malthus and economic development 1. Malthus predicted that the of the world would increase at a faster rate than the supply, resulting in mass starvation. 2. Malthus warned that if something was not done quickly, the world was headed for dismal times. 3. The population in many nations did not at the high rate that Malthus predicted, nor did the food supply grow as. a. Malthus did not foresee that major changes in agriculture would make farmers much more effective in producing food. b. Malthus did not foresee a move away from subsistence living in many parts of the world toward a higher standard of living and increased. Study Guide 188 NTC/Contemporary Publishing Group, Inc.
6 III. How Do Less-Developed Countries Become Developed Countries? A. Do countries that receive foreign aid grow and develop? 1. Some people argue that a less-developed country can only grow and develop if it is assisted through. a. For example, Haiti received foreign aid from the United States for over 50 years, but in 1965 its per-capita GDP was $360 and in 1994 it was down to $225. b. There are other countries that received less aid but that developed their economies by taxes, banks, regulations, and so on. B. The factors that growth and development 1. promotes the production of goods and services in a country, and therefore growth and development. a. Free trade lets residents of a country buy imports from the cheapest supplier, no matter where in the world he or she resides. b. Free trade opens up a world market to domestic firms. 2. provides a greater incentive to workers to work and investors to invest than in a country with relatively high taxes. 3., monetary policy eliminates antigrowth recessions. It also eliminates the waste of resources that often are part of trying to hedge against inflation. 4. Absence of on foreign investment promotes growth and development 5. Absence of on bank activity 6. Absence of and controls 7. Simple, easy business procedures make it easier and cheaper to start new businesses. 8. Protecting property 9. advances make it possible to obtain more output from the same amount of resources. Study Guide 189 NTC/Contemporary Publishing Group, Inc.
7 Building Vocabulary Fill-in the blank spaces with the correct terms from the list of economic concepts. infant mortality rate economic development developed country population growth rate vicious circle of poverty Malthus dependency ratio less-developed country (LDC) status quo 1. The is that which exists now; the existing state of affairs. 2. A country with a high per-capita GDP is a. 3. is the birth rate minus the death rate. 4. The number of children under a certain age plus the elderly (aged 65 and over) divided by the total population is called the. 5. A is country with a low per-capita GDP. 6. The idea that countries are poor because they do not save and buy capital goods, but they cannot save and buy capital goods because they are poor is known as the. 7. refers to a rise in the standard of living as measured by such things as paved roads, electricity, schools, more and higher-quality goods, and the like. 8. The is the number of children who die before their first birthday out of every 1,000 live births. 9. predicted that the population of the world would increase at a faster rate than the food supply, resulting in mass starvation. Study Guide 190 NTC/Contemporary Publishing Group, Inc.
8 AS YOU STUDY Illustrating Economic Skills Provide answers or explanations for each of the items about economic growth and economic development. 1. Explain what economists mean by economic growth. 2. Explain what economists mean by economic development. 3. What factors aid in economic growth and development? Study Guide 191 NTC/Contemporary Publishing Group, Inc.
9 Using Economic Concepts This chapter uses various data to describe the living conditions in less-developed countries. In the questions below, provide data that describes these living conditions in less-developed countries. Infant Mortality Rates: Calorie Intake: Safe Drinking Water: Medical Services: Population Growth: Study Guide 192 NTC/Contemporary Publishing Group, Inc.
10 AS YOU REVIEW Practicing for the Test True or False: Place a T in the space if the statement is true, and an F if the statement is false. 1. The population growth rate is the number of children under 15 years old plus the elderly (aged 65 and over) divided by the population. 2. A country must be economically developed if it experiences economic growth. 3. Three things that are associated with a low per-capita GDP are high infant mortality rates, lower calorie intakes, and an unskilled workforce. 4. The population growth rate equals the birthrate minus the infant mortality rate. 5. If a country s population growth rate is 2 percent and its birthrate is 5 percent, then the death rate is 3 percent. 6. Country X has a population of 2 million people. Three hundred thousand persons are under 15 years of age and 200,000 persons are 65 or over. The dependency ratio is 15 percent. 7. The poorest countries have a per-capita GDP of $160 and the richest of the rich countries have a per-capita GDP of $20,000. The richest of the rich are 125 times richer than the poorest of the poor. 8. The status quo refers to the existing state of affairs. 9. Countries are poor because they do not save and buy capital goods, but they cannot save and buy capital goods because they are poor. This describes the vicious circle of poverty. 10. According to this chapter, the people in a country with a low per-capita GDP are not as happy as the people in a country with a high per-capita GDP. Short Answer: 1. What is the international poverty line? Study Guide 193 NTC/Contemporary Publishing Group, Inc.
11 2. Explain what is meant by the dependency ratio. Why are people in less-developed countries less productive as a result of a higher dependency ratio? 3. Explain the vicious circle of poverty. Does the opposite hold that is, do wealthier countries have a greater likelihood of becoming wealthier? 4. What are some reasons that people in less-developed countries have more children than people living in developed countries? Study Guide 194 NTC/Contemporary Publishing Group, Inc.
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