Comparative Economic Development and Economic Growth Models

Practice flashcards generated from notes on Comparative Economic Development, focusing on key definitions, concepts, and models relevant for economic studies.

What is absolute poverty?

A situation where a population can only meet its bare subsistence essentials of food, clothing, and shelter.

What does the international poverty line measure?

An arbitrary international real income measure, usually expressed in constant dollars (e.g., $1 per day), used for estimating the proportion of the world’s population existing at bare levels of subsistence.

Define subsistence economy.

An economy in which production is mainly for personal consumption, yielding no more than the basic necessities of life.

What is brain drain?

The emigration of highly educated and skilled professionals from developing to developed countries.

Explain the concept of convergence in economic development.

The idea that economies with lower per capita incomes tend to grow faster than those with higher incomes, potentially narrowing the income gap over time.

What is the crude birth rate?

The number of children born alive each year per 1,000 population.

Define dependency burden.

The proportion of the total population aged 0 to 15 and 65+, considered economically unproductive.

What does depreciation refer to in economics?

The decline over time in the value of a currency in terms of another due to market forces.

What is diminishing marginal utility?

As each additional unit of a good or service is consumed, the marginal utility gained from the consumption will decrease.

What is divergence in economic terms?

The movement apart of two or more trends indicating that they are becoming less similar over time.

What are economic institutions?

The 'rules of the game' that individuals and organizations operate under within an economy.

Define fractionalization.

The degree to which a society is divided into various groups rather than being dominated by a single group.

What is free trade?

Trade in which goods can be imported and exported without any barriers such as tariffs or quotas.

How is Gross Domestic Product (GDP) defined?

The total final output of goods and services produced by a country’s economy within its territory.

What does human capital refer to?

Productive investments embodied in individuals, including skills, abilities, ideals, and health.

What is the Human Development Index (HDI)?

An index measuring national socioeconomic development based on life expectancy, educational attainment, literacy, and adjusted per capita income.

What is an imperfect market?

A market where theoretical perfect competition assumptions are violated by factors like limited buyers and sellers.

Define infrastructure in economic context.

The physical and financial capital required for transportation and communication such as roads, railways, and utilities.

What is Autarky?

A closed economy that attempts to be completely self-reliant.

What does the Harrod-Domar growth model explain?

The relationship where the growth rate of GDP depends on the national savings rate and the national capital-output ratio.

Explain the concept of dualism in economics.

The coexistence of two mutually exclusive situations, such as extreme poverty and affluence, in one location.

What are 'comprador groups'?

Local elites in dependence theory who act as fronts for foreign investors.

What is market failure?

A phenomenon resulting from market imperfections that prevents free markets from achieving optimal results.

What does the term 'poverty trap' refer to?

A vicious cycle where poverty and underdevelopment perpetuate each other over time.

What is a 'prisoners’ dilemma' in economics?

A situation where all parties would benefit from cooperation but have incentives to cheat.

What does the term 'self-sustaining growth' mean?

Economic growth that continues over the long run based on saving, investment, and other supportive activities.