LESSON 2: BASIC ECONOMIC PROBLEMS AND ECONOMIC GOALS

Level of Production and Quality of Life

What are the two factors of economic growth?

Measured through GDP, focusing on material wealth.

What is Level of Production?

Comfort of living, better health and nutrition, education, clean environment, freedom, and rich culture.

What is Quality of Life?

Linear Stages, Structural Change, International Dependence, Neoclassical, New Growth, Coordination, and O-ring Theory.

What are the seven theories of economic development? LSONNCO

Development occurs through historical stages.

What is Linear Stages of Growth?

Traditional society, preconditions for take-off, maturity, and high mass consumption.

What are the stages of Linear Stages of Growth?

Reallocation of labor from agriculture to the industrial sector.

What is Structural Change Models?

Through income level and comparative advantage.

How is Structural Change measured?

Abandoning unequal relationships between developed and developing countries.

What is International Dependence Theory?

Underdevelopment is caused by poor policies, resource allocation, and government corruption.

What is Neoclassical Theory?

What does Neoclassical Theory say causes development?

Free markets and reduced government control.

What is New Growth Theory?

Knowledge and technology are vital to economic development.

What does New Growth Theory encourage?

Investment in education and research.

What is Theory of Coordination?

A big-push public-led investment program coordinating market activities.

What is O-ring Theory?

Efficient production where skilled workers work together.

What does O-ring Theory emphasize?

High wages and investment in human capital.

What is GDP?

Monetary value of all final goods and services produced within a country's boundaries during a specific period.

What does C stand for in GDP?

Consumption.

What does I stand for in GDP?

Investment.

What does G stand for in GDP?

Government spending.

What does X stand for in GDP?

Exports.

What does M stand for in GDP?

Imports.

What is the GDP formula?

GDP = C + I + G + (X − M)

What is GNP?

Value of final goods and services produced by a country's nationals regardless of location.

What is Price Index?

Average change in prices of a selected basket over time.

What is Inflation Rate?

Percentage increase in the general price level over a period.

Price Index measures price level; Inflation Rate measures how fast it changes.

What is the relationship between Price Index and Inflation Rate?

What are the major challenges in Philippine agriculture?

Low productivity due to typhoons, El Niño, inadequate technology, research, irrigation, and land conversion.

What affects the Philippine fisheries industry?

Typhoons and declining marine resources.

What is poverty?

A condition where people can only meet basic subsistence needs.

What is absolute poverty?

Severe deprivation of basic human needs; earnings of $1/day.

What is inequality?

Unequal access to wealth or income.

What is frictional unemployment?

When a person leaves a job and looks for another.

What is cyclical unemployment?

Unemployment caused by economic downturns or recessions.

What is seasonal unemployment?

Unemployment occurring in tourism, retail, construction, and agriculture.

What is structural unemployment?

Irregular periods of employment.

What is underemployment?

Inadequate compensation.

What is inflation?

A continual increase in prices.

What is hyperinflation?

Very high inflation.

What is stagflation?

High inflation, slow economic growth, and high unemployment.

Foreign investment restrictions, low savings, limited exports, monopolies, and weak innovation/R&D.

What hampers Philippine business competitiveness? FLLMW

Road quality, public transportation, traffic, water resources, sanitation, high electricity rates, and inadequate ICT.

What are infrastructure challenges in the Philippines? RPTWSHI

Health services, malnutrition, HIV, inadequate shelter, informal settlers, and teenage pregnancies.

What are health and quality-of-life challenges?

What are education challenges?

Lack of competent teachers, high student-teacher ratios, lack of facilities, low licensure passing rates, and skills mismatch.

What are government, peace, and security challenges?

Corruption, rebel groups, West Philippine Sea conflict, drugs, and human trafficking.

Environmental degradation, climate change, pollution, water shortage, and waste management.

What are environmental challenges? ECPWW

What is the 4Ps?

Pantawid Pamilyang Pilipino Program that helps address poverty.

What is the Sustainable Livelihood Program?

A government support program addressing livelihood needs.