AP HUG Unit 7 Vocab

consumption

the using up of goods & services

developed country

wealthy, economically stable country

developing country

a country that is at a relatively early stage in the economic development

GDP

the total value of goods & services a country produces

per capita

per person

industry

any economic activity that uses machinery on a large scale to process raw materials into finished goods

raw materials

the basic, natural materials used to make a product intended for sale to costumers

• ex: metals, wood, plant products, animal products

industrialization

the process by which the interaction of social and economic factors leads to the development of industries across a community, region or country

industrial revolution

in 18th century Britain when there was a shift from small-scale, hand-crafted production to power-driven mass production

• use of steam power; growth of textile, coal, iron, and steel and railroad industries (1784)

cottage industries

small-scale industries based in the home, usually in rural areas

2nd industrial rev.

use of electricity and internal combustion engine; growth of steel, automobile, airplane, chemical, and consumer appliance industries (1870/19th century)

3rd industrial rev.

growth of computer, electronics, and information industries after WW2 (1950)

colonialism/imperialism

a system where a stronger nation dominates a weaker nation: politically, socially & economically

4th industrial rev.

growth of robotics, information, and biomedical industries today

economic sector

collections of similar, distinct economic activities based on the creation of raw materials, the production of goods, the provision of services or other activities that help structure a countries economy

primary sector

activities involving the extraction of natural resources

• ex: agriculture, fishing, forestry, mining, extracting of liquids/gas (oil)

secondary sector

the production of goods from raw materials extracted/harvested in the primary sector

• ex: manufacturing, construction, production

tertiary sector

provides services (commercial & personal)

• ex: transportation, storage marketing, selling of goods

quaternary sector

workers process and handle information and environmental technology

• ex: Google, Microsoft, Apple employees

• portion of tertiary sector

quinary sector

work involving top leaders in the gov., science, universities, media, overall people who have high levels of education & leadership

• branch of quaternary sector

postindustrial economy

extremely low primary sector employment, low secondary sector employment, and lots of tertiary employment with rising quaternary and quinary jobs

• found in US, Japan, Australia, Singapore

GDP

total value of all goods and services produced by a country’s citizens and companies within the countries borders in a year

Dual economies

two distinct divisions of economic activity across the economic sectors

• ex: Vietnam

least cost theory

model developed by Alfred Weber according to the theory businesses locate their facilities in a particular place because that location minimizes the costs of production (transport, labor and agglomeration)

Agglomeration

describes the advantage for companies in the same or similar industries in locating near each other in order to take advantage of specialized labor, materials and services

Bulk-of-break point

locations where it is more economical to break raw materials into small units before shipping them a far

• often located in areas where the more of transport changes

bulk-reducing industry

industries where raw materials cost more to transport than the finished goods

• lumber, copper smelting, furniture manufacturing

bulk-gaining industry

industries where raw materials cost less to transport than finished goods

• car manufacturing, bread production, construction equipment

industrial park

collection of manufacturing facilities/land made for factories, which are found in suburbs & close to highways

human development

the processes involved in the improvement of people’s freedoms, rights, capabilities, choices and material conditions

GNP

the total value of the goods & services produced by a countries citizens & companies both domestically and internationally in a year

GNI

per capita, the total value of goods and services globally produced by a country in a year divided by the countries population (includes the income of non-citizens living in the country as well.)

formal sector

includes businesses, enterprises, and other economic activities that have government supervision, monitoring, and protection and are taxed

informal sector

any part of a country’s economy that is outside of government monitoring or regulation and is not taxed

• ex: street vendors selling flowers, unlicensed/unregulated food & beverage stands

Literacy Rate

% of population that is literate/can read

• helps see level of development in a country

HDI (Human Development Index)

measures overall level of development of a country using life expectancy at birth, a dad to education measured in expected and mean years of schooling, and standard of living measured by GNI per capita

GDI (gender development index)

calculates gender disparities based on health, knowledge, and standard of living of the genders

• measured using female HDI as % of male HDI

GII(gender inequality index)

calculates inequality using reproductive health, empowerment, and labor-market participation

• measured using a range of 0.0-1.0, 0.0 = men and women share equal roles and 1.0 = women have little equality

Women’s empowerment

includes women’s options and access to participate fully in the social and economic spheres of a society

LMP

measures an economy’s active labor force and is calculated by taking the sum of all employed workers and dividing that # by the working-age population

Microloans

Very small short-terms loans with low interest intended to help people in need

Grameen Bank

started by a Bangladeshi professor, first ever micro loan institution , helped many people (mainly women) break away from poverty, get financial security

Rostow’s Theory

model that measures how countries economic level using 5 stages its limits are that it assumes:

• all countries want to be democratic, capitalist, & industrialized

• all countries do/will follow these stages of growth

Rostow Stage 1

traditional society - subsistence farming, pre industrial

rostow stage 2

preconditions for takeoff - increased outputs, beginning of industrialization, workforce shifts from primarily farming to manufacturing

rostow stage 3

take off - industrialization, urbanization increase, rapid improvement in some industries due to tech. advances

rostow stage 4

drive to maturity: stable growth, industries have reached max effectiveness, increased income = increased consumption

rostow stage 5

high mass consumption - shift from dominant production of industrial manufacturing to dominant production of consumer goods and services, overconsumption issues

wallerstein’s theory

describes the relationship between countries and helps explain the history of uneven economic development in the world economy, its limits are that:

• its too focused on economics therefor can’t categorize countries easily (there’s political and societal factor and differences)

• doesn’t take into account other measures of dominance in the periphery and core country relationship such as cultural influence

core regions

regions that dominate and take advantage of periphery countries for cheap labor & raw materials

peripheral regions

regions that are underdeveloped, & dependent on core countries for capital (consumer goods & money)

semi-periphery

regions that have qualities of both core and periphery regions

dependency theory

describes the development challenges & limitations faced by poorer countries, & the political/economic relationships poorer countries have with the richer countries, its limits are that:

• there’s no standard to distinguish dependent and non dependent countries

• it doesn’t take in other factors of underdevelopment such as corruption within a country

commodity dependence

when more than 60% of a countries exports & economic health are tied to one or two resources such as oil, timber or plantation crops

comparative advantage

refers to the relative cost advantages of producing certain goods & services for trade

complementarity

refers to the mutually beneficial trade relationship between two countries that results when they have different comparative advantages

neoliberalism

the belief that open markets and free trade(two key characteristics of capitalism) across the globe will lead to economic development everywhere, lesson tensions between countries by fostering support for common values and spread democracy and human rights

supranational organizations

organization of three or more countries to promote shared objectives

deindustrialization

the change that occurs with the decline in the % of workers employed in the secondary sector, & a reduction of a regions industrial capacity/ activity, like heavy industry and manufacturing

growth poles

places of economic activity clustered around one or more high-growth industries that stimulate economic growth by capitalizing on some special asset

globalization

the process by which businesses or other organizations develop international influence or start operating on an international scale

just-in-time delivery

materials are delivered when they are needed for short-term production, so that companies can avoid paying to store extra inventory at their facilities

fordism

the manufacturing economy and system derived from assembly-line mass production and the mass consumption of standardized goods

post-fordism

the system of production that relies on automation through the use of robots and computer systems and is centered on low-volume manufacturing and flexible systems that allows for quick responses to changes in the market

offshore outsourcing

the process in which companies move production to places outside the country they are headquartered in

division of labor

the type of arrangement in which each worker specializes in a particular task or job

international division of labor

the specialization, by countries, in particular products for export

multiplier effects

opportunities that can potentially develop from an economic change

SEZ (special economic zones)

- an area within a country that is subject to different & more beneficial economic regulations than other areas

EPZ (export processing zones)

sites where manufacturing of exports is done without tariffs or other financial incentives such as taxes

FTZ (free trade zones)

provide customs-related advantages & exemptions from tariffs and taxes

sustainable practices

practices that provide ongoing economic & social benefits without degrading the environment

sustainable development goals

17 goals adopted by the UN intended to reduce the inequalities among countries in the core, periphery & semi-periphery and to achieve a more sustainable future for all

Ecotourism

A form of tourism based on the enjoyment of scenic areas or natural wonders that aims to provide an experience of nature or culture in an environmentally sustainable way