Unit 6 APHG AP Exam Review

Economic Development

The improvement of living standards by economic growth.

Gross Domestic Product (GDP)

The total market value of all final goods and services produced within a country in a given period.

Gross National Income (GNI)

The total income earned by a country's residents both domestically and internationally.

Human Development Index (HDI)

A composite index measuring a country's average achievements in three basic dimensions

Primary Sector

Extraction of natural resources (e.g., agriculture, mining).

Secondary Sector

Manufacturing and processing of goods.

Tertiary Sector

Provision of services (e.g., education, healthcare).

Quaternary Sector

Knowledge-based activities (e.g., research and development).

Quinary Sector

High-level decision-making and services (e.g., top executives, university professors).

Formal Economy

Economic activities that are regulated by the government and are included in a country's official statistics.

Informal Economy

Economic activities that are not regulated by the government and are not included in official statistics.

Market Economy

An economic system where decisions regarding investment, production, and distribution are based on supply and demand.

Planned/Command Economy

An economic system where the government makes all decisions regarding the production and distribution of goods and services.

Mixed Economy

An economic system that combines elements of both market and planned economies.

Capitalism

An economic system characterized by private ownership of the means of production and the operation for profit.

Socialism

An economic system where the means of production are owned and controlled by the state or public.

Communism

An economic system where all property is owned by the community and each person contributes and receives according to their ability and needs.

Dependency Theory

The idea that resources flow from a periphery of poor and underdeveloped states to a core of wealthy states, enriching the latter at the expense of the former.

World Systems Theory

A theory that divides the world into a core, semi-periphery, and periphery, based on economic and political power.

Neocolonialism

The use of economic, political, cultural, or other pressures to control or influence other countries, especially former dependencies.

Self-Sufficiency Model

A development strategy that emphasizes domestic production of goods and services and discourages foreign ownership.

International Trade Model

A development strategy that encourages countries to open themselves to foreign investment and international markets.

Fair Trade

Trade in which fair prices are paid to producers in developing countries.

Foreign Direct Investment (FDI)

Investment made by a foreign entity in the assets or ownership of a company in another country.

Special Economic Zones (SEZs)

Designated areas in countries that possess special economic regulations that differ from other areas in the same country.

Export-Oriented Industrialization (EOI)

A trade and economic policy aiming to speed up the industrialization process of a country by exporting goods for which the nation has a comparative advantage.

Footloose Industry

An industry that can be placed at any location without effect from factors such as resources or transport.

Deindustrialization

The decline of industrial activity in a region or economy.

Deglomeration

The process of industries moving away from each other to avoid overcrowding and competition.

Agglomeration

The clustering of industries for mutual benefit, such as shared services and infrastructure.

Break-of-Bulk Point

A location where goods are transferred from one mode of transportation to another.

Bulk-Gaining Industry

An industry whose products weigh more after assembly than in their constituent parts.

Bulk-Reducing Industry

An industry whose products weigh less after assembly than in their constituent parts.

Acid Rain

Precipitation that is significantly more acidic than natural, unpolluted rain, often due to industrial emissions.

Greenhouse Gases

Gases that trap heat in the atmosphere, contributing to global warming.

Climate Change

Long-term changes in temperature, precipitation, and other atmospheric conditions on Earth.

Sustainable Development

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Ecotourism

Tourism directed toward exotic, often threatened, natural environments, intended to support conservation efforts and observe wildlife.

Ecological Footprint

A measure of human impact on Earth's ecosystems, expressed as the amount of land required to sustain their use of natural resources.

Fordism

A system of mass production that uses standardized components and assembly line techniques, named after Henry Ford.

Post-Fordism

A more flexible production model that emphasizes small-batch production, specialized jobs, and global outsourcing.

Growth Pole

A region where economic development is centered and from which it spreads to surrounding areas.

Complementarity

The degree to which one place can supply something that another place demands (important in trade relationships).

Comparative Advantage

The ability of a country or region to produce a good or service more efficiently than another.

Just-in-Time Manufacturing

Inventory strategy where components arrive exactly when needed, reducing storage costs but increasing vulnerability to supply chain disruptions.

Export-Oriented Industrialization (EOI)

Economic policy aimed at speeding up the industrialization process by exporting goods for which the nation has a comparative advantage.

Formal Economy

The legal economy that is taxed and monitored by a government.

Informal Economy

Economic activity that is neither taxed nor monitored by a government — often not included in GDP.

Multiplier Effect

An increase in spending produces an increase in national income and consumption greater than the initial amount spent.

Techno-pole

A center of high-tech manufacturing and information-based industry.

Gender Inequality Index (GII)

A UN measure of gender disparity based on reproductive health, empowerment, and labor market participation.

Microfinance / Microcredit

The provision of small loans to poor individuals and small businesses in developing countries who are typically excluded from traditional banking.

Rostow’s Stages of Economic Growth

A model describing how countries develop economically over five stages — from traditional society to high mass consumption.

Outsourcing

Contracting a business function to another company.

Offshoring

Moving a business process to another country to reduce costs.

Technological Spillover

When innovation or knowledge created in one firm or region benefits others unintentionally.

Service-Based Economy

An economy dominated by tertiary and quaternary sector jobs, such as healthcare, education, and technology.

Transnational Corporations (TNCs)

Large companies that operate in multiple countries and often shift production to areas with cheaper labor or resources.