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What are the main economic models and theories to know for Unit 3 in AP Human Geography?
Brandt Line, Core-Periphery Concept, Dependency Theory, Rostow’s Modernization Model, World Systems Theory.
Fill in the blank: The key economic terms include __________, break-of-bulk, comparative advantage, and deindustrialization.
agglomeration industries
What is HDI in the context of economic development?
Human Development Index, a measure of a country's social and economic development.
Fill in the blank: The sectors of the economy are primary, secondary, __________, and quaternary.
tertiary
What does the Brandt Line illustrate?
A visualization dividing the world into the more developed 'Global North' and the less developed 'Global South'.
Fill in the blank: Weber’s Least-Cost Theory suggests that industries should locate to minimize _________, labor, and agglomeration costs.
transportation
What are some of the problems created by industrialization in developed countries?
Pollution, deindustrialization, and job insecurity due to shifts towards a service economy.
Fill in the blank: Theories such as _________ argue that economic relationships keep LDCs dependent on MDCs.
Dependency Theory
What is the significance of transnational corporations (TNCs)?
They operate in multiple countries, often locating production in LDCs to take advantage of lower costs.
Fill in the blank: The primary sector involves _______ resources, whereas the quaternary sector involves knowledge-based services.
extracting
What is the Core-Periphery Concept?
A model that describes how economic, political, and cultural power is distributed between dominant core regions and dependent peripheral areas.
What does Dependency Theory explain?
The theory that resources flow from poor and underdeveloped states to a wealthy state, enriching the latter at the expense of the former.
Define Rostow’s Modernization Model.
A five-stage theory of development that argues economies develop in a linear fashion from traditional society to the age of high mass consumption.
What does World Systems Theory emphasize?
A view that focuses on the global economic system, viewing the world as a complex system of interdependent nations, divided into core, semi-periphery, and periphery countries.
What is agglomeration in economic terms?
The clustering of industries and businesses in a specific area to achieve production efficiencies and cost reductions.
Describe deindustrialization.
A process whereby the industrial sectors of an economy decline, leading to job losses and a shift towards a service-based economy.
What is the significance of the Human Development Index (HDI)?
HDI measures average achievement in key dimensions of human development: health, education, and standard of living.
List the four sectors of the economy.
Primary, Secondary, Tertiary, and Quaternary sectors.
Explain the term 'break-of-bulk'.
A point where goods are transferred from one mode of transport to another, often leading to lower transportation costs.
What are transnational corporations (TNCs)?
Corporations that operate in more than one country and are often involved in global production and distribution.
What is the definition of economic development?
The process through which a nation improves the economic, political, and social well-being of its people.
What is the purpose of economic indicators?
To measure the economic performance and health of a country.
What are examples of economic indicators?
GDP, unemployment rate, inflation rate, and HDI.
What is GDP?
Gross Domestic Product, the total value of all goods and services produced within a country's borders in a specific time period.
What does the term ‘regional development’ refer to?
The efforts and policies directed towards improving the economic conditions of specific areas.
What are mixed economies?
Economic systems that combine elements of both capitalism and socialism.
What does urbanization mean?
The process by which an increasing percentage of a population lives in cities and suburbs.
What is the role of infrastructure in economic development?
Infrastructure supports economic activity by providing essential services like transportation, communication, and utilities.
What are microfinance institutions?
Organizations that provide financial services to low-income individuals or those lacking access to typical banking services.
Define sustainable development.
Economic development that is conducted without depletion of natural resources.
What is the role of foreign direct investment (FDI)?
Investment made by a company or individual in one country in business interests in another country.
What is the difference between relative poverty and absolute poverty?
Relative poverty is defined in relation to the economic status of other people in society, while absolute poverty refers to a set standard of income.
What does the term ‘population density’ refer to?
The number of people living per unit of area, typically expressed as people per square kilometer.
What is a demographic transition model?
A model that describes the transformation of countries from having high birth and death rates to lower birth and death rates.
Explain informal economy.
Economic activities that are not monitored or regulated by the government.
What is the primary goal of taxation?
To generate revenue for government expenditure and to redistribute resources within society.
What are export-led growth strategies?
Economic strategies that focus on increasing the production of goods and services intended for export.
What is industrialization?
The process of transforming an economy from primarily agrarian to one based on the manufacturing of goods.
What are the three main types of economies?
Traditional, command, and market economies.
What does the term ‘brain drain’ mean?
The emigration of highly trained or qualified people from a particular country.
What is urban sprawl?
The uncontrolled expansion of urban areas into surrounding rural land.
Define the term 'gentrification'.
The process of renovating and improving a district so that it conforms to middle-class taste.
What does 'localized economy' mean?
An economic system that prioritizes local resources, production, and consumption.
What are the primary components of a market economy?
Supply and demand, competition, and private property.
What is a planned economy?
An economic system where the government makes all economic decisions.
Explain the concept of 'value chain'.
The full range of activities that businesses engage in to bring a product to the market.
What is the role of government in a capitalist economy?
To regulate the economy, provide public goods, and ensure competition.
Define 'entrepreneurship'.
The process of starting and managing a new business venture.
What does the term 'subsidy' mean?
Financial assistance granted by the government to encourage the production of certain goods.
What is 'inflation'?
The rate at which the general level of prices for goods and services is rising.
What is the significance of 'consumer confidence'?
A measure of how optimistic consumers are regarding their expected financial situation.
Define 'monopoly'.
A market structure where a single seller controls the entire market for a product or service.
What are 'natural resources'?
Materials or substances that occur in nature and can be used for economic gain.
Explain the term 'fiscal policy'.
The use of government spending and taxation to influence the economy.
What is 'capital', in economic terms?
Financial assets or resources used to fund the production of goods and services.
Define 'tax base'.
The total value of assets or income that can be taxed by the government.
What are 'public goods'?
Goods that are non-excludable and non-rivalrous, meaning everyone can use them.
What is 'labor market'?
The market in which workers find paying work, employers find willing workers, and wage rates are established.
Define 'trade deficit'.
When a country's imports exceed its exports, leading to negative balance of trade.
What is the responsibility of a central bank?
To oversee the monetary system for a nation, manage interest rates, and control inflation.
What is economic globalization?
The increasing economic interdependence among countries through trade, investment, and capital flows.
Define microeconomics.
The branch of economics that studies individual and business decision-making processes.
What is macroeconomics?
The branch of economics that examines the economy as a whole, focusing on aggregate outcomes.
What is the purpose of fiscal policy?
To influence the economy through government spending and tax policies.
Explain supply and demand.
The relationship between the quantity of a commodity available and the desire for that commodity.
What is a commodity?
A basic good used in commerce that is interchangeable with other goods of the same type.
Define price elasticity of demand.
A measure of how much the quantity demanded of a good responds to a change in its price.
What is a recession?
A significant decline in economic activity spread across the economy lasting more than a few months.
What role do interest rates play in the economy?
They influence borrowing and spending by determining the cost of loans.
What are tariffs?
Taxes imposed on imported goods to protect domestic industries.
Define monopoly power.
The ability of a firm to set prices above competitive levels due to lack of competition.
What is GDP per capita?
A measure of a country's economic output that accounts for its number of people.
Explain the term business cycle.
The fluctuations in economic activity that an economy experiences over time.
What is a trade agreement?
A pact between two or more nations to facilitate trade and reduce tariffs.
Define consumer surplus.
The difference between what consumers are willing to pay and what they actually pay.
What does the term 'inflation rate' refer to?
The percentage change in the price level of goods and services over a specific period.
What is a market structure?
The organizational and competitive characteristics of a market.
Define externalities.
The costs or benefits incurred by a third party who did not choose to incur those costs or benefits.
What is human capital?
The economic value of an individual's skills, knowledge, and experience.
Explain what a budget deficit is.
A situation where expenses exceed revenues, leading to a shortfall.
What is collective bargaining?
The negotiation process between employers and a group of employees aimed at reaching agreements.
What is the primary purpose of economic development?
To improve the economic, political, and social well-being of a nation's people.
Explain the term 'market equilibrium'.
The point where supply equals demand for a product, leading to stable prices.
What is the function of a central bank?
To manage a nation's monetary policy, regulate banks, and provide financial services.
Define fiscal policy.
Government policy regarding taxation and spending to influence the economy.
What does GDP stand for?
Gross Domestic Product, which measures the total value of goods and services produced.
What is the difference between nominal and real GDP?
Nominal GDP is measured at current prices, while real GDP is adjusted for inflation.
What is the role of competition in a market economy?
To promote efficiency, lower prices, and foster innovation among businesses.
What is a recession?
A period of temporary economic decline during which trade and industrial activity are reduced.
Define the term 'interest rate'.
The cost of borrowing money, expressed as a percentage of the loan amount.
What does 'supply chain' refer to?
The entire system of production, processing, and distribution of goods.
What is unemployment rate?
The percentage of the labor force that is jobless and actively seeking employment.
Explain the concept of 'subsidy'.
Financial aid provided by the government to support a specific industry or economic sector.
What is the purpose of tariffs?
To protect domestic industries by making imported goods more expensive.
What is consumer behavior?
The study of how individuals make decisions to spend their available resources.
What does 'inflation' mean?
The rate at which the general level of prices for goods and services rises.
What is economic disparity?
The unequal distribution of income and opportunity between different groups in society.
Define the term 'capital goods'.
Buildings, machinery, tools, and equipment used in the production process.
What is a trade balance?
The difference between the value of a country's exports and imports.
What is the role of entrepreneurship in the economy?
To drive innovation, create jobs, and stimulate economic growth.
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