ap hug unit 7

Development

A process of improvement in the material conditions of people through diffusion of knowledge and technology.

Gross Domestic Product (GDP)

The sum total of the value of all the goods and services produced in a nation

• Japan owned Toyota sales would go towards us GDP

goods+services=GDP

Gross National Product (GNP)

The total value of goods and services by citizens and corporations as well as foreign investments (usually in one year)

• Ex: Toyota's sales in the US go towards Japan's GNP

domestic+international goods and services= GNP

Gross National Income (GNI)

most accurate measurement because it accounts for trade

• because MDCs have a lot of of imports

GDP+(exports-imports)= GNI

economic sectors

"sections" of an economy. The three sectors are the primary, secondary, and tertiary sectors.

Primary Sector

The portion of the economy concerned with the direct extraction of materials from Earth's surface,

• agriculture

• mining

• fishing

• forestry.

• High in LDCs

• Ethiopia: mining

Secondary Sector

The portion of the economy concerned with manufacturing useful products through processing, transforming, and assembling raw materials.

• High in LDCs

• China

Bulk-gaining product

An end product that is bigger or heavier than the raw materials used to make it, such as a bicycle

Bulk-reducing product

A product that is smaller or lighter than the raw materials it uses, such as paper

Tertiary Sector

The portion of the economy concerned with transportation, communications, and utilities, sometimes extended to the provision of all goods and services to people in exchange for payment.

• High in MDCs

Quartinary Sector

Job sector with mostly knowledge based jobs such as education, technology, finances, etc.

• High in MDCs

Quintinary Sector

highest level of decision making government officials and Business officials.

• Higher in MDCs

Formal economy

The legal economy that is taxed and monitored by a government and is included in a government's Gross National Product; as opposed to an informal economy

Informal Economy

Economic activity that is neither taxed nor monitored by a government; and is not included in that government's Gross National Product; as opposed to a formal economy

• Illegal: Drugs, human Trafficking

• Under the table: Babysitting

• makes of a larger amount of income in LDCs

Island of development

Governments build up and concentrates economic development in a certain city that is surrounded by a less developed area

• Ex: seoul korea

Gini Coefficient

A measure of income inequality within a population, ranging from zero for complete equality, to one if one person has all the income.

• Lower in MDCs

Industrial Revolution

A series of improvements in industrial technology that transformed the process of manufacturing goods. A shift from agriculture based economies to industrial economies

• improved ag tech = food surplus

Fueled city growth and development

• Driven by steam motor

• Started in Britain: lead to increased development in Europe

• 1820

Why Europe

-Access to rivers

-Lots of coal and natural resources

• large colonial empire = access to even more resources

• More science and innovation (small pop drove)

Cottage Industry

Manufacturing based in homes rather than in a factory, commonly found before the Industrial Revolution.

Weber's Least Cost Theory

theory that described the optimal location of a manufacturing firm in relation to the cost of transportation, labor, and advantages through agglomeration

• If raw materials are perishable or heavy the factory is situated close to the raw materials

• If finished product is heavier than the raw materials then the factory is located close to the market

• if an item is fragile even if it is a bulk losing product the factory will be close to the market

Ex: potato chips

agglomeration economies

the benefits that come from when firms and people locate near one another in cities and industrial clusters.

• sometimes referred to as growth poles

Ex: Tech in Silicon Valley California

Ex: Research triangle North Carolina

• Research hub: Duke, UNC, NC State

Break of Bulk Point

A location where transfer is possible from one mode of transportation to another.

• can get more expansive with these switches

Containerization

The transporting of goods in standard-sized shipping containers.

• made loading and unloading ships more time efficient

Maquiladoras

The term given to zones in northern Mexico with factories supplying manufactured goods to the U.S. market. The low-wage workers in the primarily foreign-owned factories assemble imported components and/or raw materials and then export finished goods.

Rostow's Stages of Economic Growth

theory that assumes all countries are capable of development along the same trajectory which encompasses five stages of linear development towards self-sustained economic growth and high levels of mass consumption

• Traditional Society

• Pre-conditions to take-off: leadership begins to invest in the country

• Take-off: Major export industry

• Drive to Maturity: Slow pop growth more specialized industry and skilled workers

• Mass Consumption: pop decline or negative tertiary sector

-criticism: asumes everyone wants mass consumerism, based on European countries, asumes isolated economies

Wallertein's World Systems theory

explains spatial relationships between countries and uneven economic development by classifying countries into Core, Semi-periphery, periphery

• Core: buys raw materials, pay for cheap labor, sell consumer goods @ high prices

• provides money flow to semi and periphery

• core and semi periphery: industrialized first

• rural to urban migration

Development

improvement in human well-being through economic advancement

Brandt Line

a line that divides the North and the South. It shows the divide between the more developed regions and the less developed regions.

• global north and south

• over generalization

• doesn't account for NICs

Complementary

the degree to which one place can supply something that another place demands

comparative advantage theory

theory that states that a country should sell to other countries those products that it produces most effectively and efficiently, and buy from other countries those products that it cannot produce as effectively or efficiently

• Ex: Florida and NE States: provides fruit

• lower opportunity cost

opportunity cost

the loss of potential gain from other alternatives when one alternative is chosen.

• Leads to specialization of industry

• Supports comparative advantage theory

-Ex: US wheat and Columbia Coffe

Neo liberal Policies

economic policies that require a minimal

role of the government assuming the desirability of free markets as the ideal condition not only for economic organization but also for political and social.

-free market capitalism

-open trade boarders

-privatize

-ex; EU, OPEC, Mercosor

European Union

An international organization of European countries formed after World War II to reduce trade barriers and increase cooperation among its members.

• common currency: sink together

• limit tariffs

Mercoser

regional trade agreement to promote the free trade of and movement of goods, people and currency

-aims to be like EU