4.1.1.

What is the growth rate of a country measured by?

-The growth rate of a country is measured by the annual change in its gross domestic product.

Define emerging economies.

-Economies that have increasing growth rates but relatively low income per capita.

-E.g. India + China.

Why are emerging economies growing at a faster rate than the UK’s?

-Because of the growth of their manufacturing sectors.

-The UK economy been declining manufacturing sector as businesses choose to manufacture in emerging economies due to lower labour costs + access to raw materials.

Define globalisation.

-The economic integration of different countries through increasing freedoms in the cross-border movement of people, goods/services, technology + finance.

What is the impact of globalisation?

-The integration of global economies has impacted national cultures, spread ideas + sped up industrialisation in developing nations.

How does a growing middle class in emerging economies affect international firms?

-It boosts citizens’ spending on domestic + imported goods, increasing the profitability of international firms operating there.

What is the impact of economic growth on businesses?

-Potential for increased profits as businesses enter new markets + gain more customers.

-Customers likely to have income elastic demand, leading to increased sales + revenues.

-Reduced costs of production, as businesses benefit from lower labour costs + cheaper raw materials in emerging economies.

-Increase in investment - as the economy grows, businesses want to expand, so they’re more likely to invest.

What is the impact of economic growth on individuals?

-Reduced unemployment, as there is more demand, which requires more labour to increase output.

-Increased average incomes, as individuals now have rising incomes due to employment, which increases the standard of living.

-Access to quality public services as more tax revenue is generated, so the government can improve the quantity + quality of public services.

What are 4 key indicators of growth?

-GDP per capita.

-Literacy.

-Health.

-Human development index.

Indicator of growth - GDP per capita.

-Calculated by taking the total output of a country + dividing it by the number of people in that country.

-High GDP per capita is associated with a high standard of living.

-GDP per capita is a useful indicator to compare the growth in two countries.

Indicator of growth - health.

-The health of a country's citizens is important to businesses that want to invest in emerging economies, as this will have an impact on the quality of the workforce.

-Average life expectancy, the infant mortality rate, access to healthcare + access to clean water.

Indicator of growth - literacy.

-Literacy refers to the percentage of adults within an economy who can read + write.

-Information about literacy rates is important, as this will determine the quality of the workforce as well as the customers businesses will be selling to.

Indicator of growth - human development index.

-Combines the factors of life expectancy, education + income to determine the quality of development of citizens within a country.

-Created by the United Nations + is measured between 0 + 1.

What are problems with using the HDI as a measure of development?

-It doesn’t account for inequalities within a country.

-There’s a lack of reliable data in some countries.