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industrialization
the development of industries for the machine production of goods
*transformation from agriculture to manufacturing
industrialization extra info
- textile factory
- cotton gin
- railroad
colonialism
people move into and settle on the land of another country
*a particular type of imperialism
colonialism extra info
Great Britain, France, Netherlands, Belgium, Italy, Germany controlling lands in Africa and Asia
imperialism
a policy of extending a country's political and economic power
*a broader concept
imperialism extra info
it includes a variety of ways of influence:
- direct conquest
- economic control
- cultural dominance
primary sector
the portion of the economy concerned with the direct extraction of materials from Earth's surface
*mainly found in LDC's
primary sector extra info
it includes activities such as:
- agriculture
- mining
- fishing
- forestry
secondary sector
the portion of the economy concerned with manufacturing useful products through processing, transforming, and assembling raw materials
*mainly found in LDC's
secondary sector extra info
it includes activities such as:
- manufacturing
- construction
tertiary sector
the portion of the economy concerned with transportation, communications, and utilities; sometimes extended to the provision of all goods and services to people, in exchange for payment
*mainly found in MDC's
tertiary sector extra info
it includes activities such as:
- marketing
- banking
- law
- education
- retail
quaternary sector
the knowledge-based sector
*mainly found in MDC's
quaternary sector extra info
it includes activities such as:
- research and development
- business consulting
- education administration
quinary sector
the highest levels of decision-making and includes the top officials in various levels of government and business
*mainly found in MDC's
quinary sector extra info
it includes activities such as:
- country's president
- corporate executives
- department of education
break-of-bulk points
a location where transfer is possible from one mode of transportation to another
break-of-bulk points extra info
- seaports
- airports
*a steel mill near the port of Baltimore receives iron ore from South America and coal by train from Appalachia
Alfred Weber's Least Cost Theory
an industry is located where it can minimize costs and maximize profits
Alfred Weber's Least Cost Theory extra info
3 factors when deciding where to open:
1. transport costs (getting raw materials to factory and finished goods to market)
2. labor costs
3. agglomeration economies
core countries
- regions of the world with high levels of industrialization, urbanization, technology, and standard of living
- low birth rate, low death rate, low natural increase rate
core countries extra info
- North America, Europe, South Pacific, parts of Asia
*MDC's are countries that occupy core regions (U.S., Canada, Italy, Japan)
semi-periphery countries
- exhibit core features and periphery features
- exploited by the core but exploit the periphery
semi-periphery countries extra info
- parts of South Asia, SW Asia, Africa, Latin America
*LDC's are countries that occupy semi-peripheral regions (India, Saudi Arabia, UAE, Egypt, South Africa, Mexico, China, Brazil)
periphery countries
- regions of the world that are not as highly industrialized or urbanized - lower standard of living and literacy rate
- high birth rate and high death rate
- agricultural lifestyle
periphery countries extra info
- sub-Saharan Africa, parts of Latin America, part of North Africa and SW Asia
*LDC's are countries that occupy peripheral regions (Kenya, Rwanda, Ecuador, Morocco)
Gross Domestic Product (GDP)
the value of the total output of goods and services produced in a country in a give time period (normally one year)
Gross Domestic Product (GDP) extra info
examples of high and low GDP's
- Norway: $398.8 billion
- Rwanda: $9.14 billion
Gross National Product (GNP)
the total value of all goods and services produced by a country's economy in a year
*products by companies, industries, and all firms owned
Gross National Product (GNP) extra info
examples of high and low GNP's
- Norway: $335.6 billion
- Rwanda: $24.31 billion
Gross National Income (GNI) per capita
the value of the output of goods and services produced in a country in a year, including money that leaves and enters the country
formal economy
the "legal" economy that governments tax and monitor
formal economy extra info
items taxed and monitored:
- businesses
- education
- healthcare
informal economy
the "illegal" or uncounted economy that governments do not tax and keep track of
informal economy extra info
items not kept track of:
- garden plot in a backyard
- black market
- illegal drug trade
income distribution
how income (money received) is divided among different groups or individuals
*Gini index or coefficient - measures income distribution. Value ranges 0-1. 0 means income is the same. A higher #, higher inequality
income distribution extra info
- North America and Europe: unequal income among the classes
- Africa: low incomes
- Asia: largest income gains
fertility rates
the average number of children a women will have throughout her childbearing years (ages 15 to 49)
*total fertility rate (TFR)
fertility rates extra info
- low in MDC's
- high in LDC's
*accurately reflects cultural norms - how people weigh the costs and benefits of having a child, role of women and education
infant mortality rate (IMR)
the total # of deaths in a year among infants under one year of age for every 1,000 live births in a society
infant mortality rate (IMR) extra info
- low in MDC's
- high in LDC's
*reflects a country's health care system - well trained doctors, modern hospitals, access to medicine
fossil fuels
a nonrenewable energy resource formed from the remains of organisms that lived long ago
fossil fuels extra info
examples:
- oil
- coal
- natural gas
renewable energy
any source of energy that can be continually produced and is inexhaustible given current conditions
renewable energy extra info
examples:
- solar energy
- wind energy
- hydropower
literacy rates
the percentage off a country's people who can read and write
literacy rates extra info
- literacy rates above 99% are common in MDC's
- more than 730 million people are not literate. Most are female and most live in LDC's
Gender Inequality Index (GII)
a measure of the extent of each country's gender inequality. Considers reproductive health, empowerment, and labor market participation of women
Gender Inequality Index (GII) extra info
the score is a measure of the percentage of potential human development lost due to gender inequality
*Guatemala - 0.533, 53.3% loss in human potential due to gender inequality
reproductive health
a state of complete physical, mental, and social well-being in all matters relating to the reproductive system and to its functions and processes
reproductive health extra info
in reference to GII, reproductive health is maternal mortality rates and adolescent fertility rates
gender empowerment
the authority of power of people of any gender
gender empowerment extra info
in reference to GII, gender empowerment is the share of government seats held by each sex and the proportion of adult females and males with at least some secondary education
labor market participation
an economy's active labor force and its the sum of all employed workers divided by the working age population - # of people who are either employed or actively looking for work
labor market participation extra info
in reference to GII, labor market participation is indicated by the labor force participation rate of female and male populations aged 15 years and older
Human Development Index (HDI)
an indicator of the level of development for each country, constructed by the UN, that is based on income, literacy, education, and life expectancy
Human Development Index (HDI) extra info
- Norway ranks 1st in HDI
- U.S. ranks 6th
- Qatar ranks 32nd
Rostow's Stages of Economic Growth
a modernization model that assumes all countries want to modernize and all eventually would at different speeds
Rostow's Stages of Economic Growth extra info
5 stages:
1. traditional society
2. pre-condition for take-off
3. take-off
4. drive to maturity
5. high mass consumption
Wallerstein's World Systems Theory
a dependency model that all countries are dependent on each other
Wallterstein's World Systems Theory extra info
3 categories:
1. core
2. semi-periphery
3. periphery
dependency theory
countries do not exist in isolation but are part of an intertwined world system in which all countries are dependent on each other
dependency theory extra info
Wallerstein's World Systems Theory is the best example of dependency theory
commodity theory
the value of a product or service is related to its availability. A product that is in short supply is perceived as having greater value than one that is readily available
commodity theory extra info
oil from Saudi Arabia has great value in the U.S. since it is not readily available to the U.S. - we will pay $ for that commodity
complementary advantage
a measure of how well one country' export profile matches another country's import profile
complementary advantage extra info
Colombia produces coffee beans and is imported in great numbers by the United States
comparative advantage
the ability of an individual or group to carry out a particular economic activity more efficiently than any other activity
comparative advantage extra info
climate and soil in Florida gives them an advantage over other states in growing oranges
neoliberal policies
contemporarily used to refer to market-oriented reform policies such as "eliminating price controls, deregulating capital markets, lowering trade barriers" and reducing state influence in the economy
neoliberal policies extra info
focus on "lowering trade barriers" which has fostered greater globalization through creating free trade agreements
free trade agreements
the flow of goods and services across boundaries unimpeded by tariffs or other restrictions
free trade agreements extra info
examples:
- European Union
- World Trade Organization
- OPEC
European Union (EU)
international organization comprised of Western European states in order to promote development through economic cooperation
European Union (EU) extra info
- created a common currency, the euro
- goods, services, and workers may move freely among member countries
World Trade Organization (WTO)
an intergovernmental organization concerned with the regulation of international trade between nations
World Trade Organization (WTO) extra info
deals with the regulation of trade in goods, services, and intellectual property between participating countries - framework for trade agreements
MERCOSUR
an economic and political South American trade bloc
MERCOSUR extra info
full members are Argentina, Brazil, Paraguay, Uruguay
OPEC
organization of petroleum exporting countries - aims to manage the supply of oil in an effort to set the price of oil on the world market
OPEC extra info
member countries are: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela
tariffs
a tax that a government charges people on import and export goods
tariffs extra info
- coffee tariff
- oil tariff
debt crisis
a situation in which payments on debt grow so large that countries cannot continue to pay off the debt
debt crisis extra info
*countries that have experienced a debt crisis
- Greece, 2009
- Spain, 2008
- Iceland, 2009
International Monetary Fund (IMF)
works to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment, and reduce poverty around the world
International Monetary Fund (IMF) extra info
primary purpose is global stability
outsourcing
contracting work out to noncompany employees or other companies
outsourcing extra info
outsource to take advantage of lower labor costs, lower tax rates, and cheaper land prices
Newly Industrialized Countries (NIC's)
a country whose level of economic development ranks it somewhere between developing and developed (semi-periphery) - moved away from agriculture and into industrialized, urban
Newly Industrialized Countries (NIC's) extra info
- examples in the 70's and 80's: Hong Kong, South Korea, Singapore, Taiwan
- examples in the 2000's: South Africa, Mexico, Brazil, China, India, Malaysia, Philippines, Thailand, Turkey
Special Economic Zones (SEZ)
specific area within a country in which tax and investment incentives are implemented to attract foreign (and domestic) businesses and investment
Special Economic Zones (SEZ) extra info
specific term used in China - near international airports, seaports, or land borders
*ease of export
Free Trade Zones
special zones in which all trade barriers between two countries are eliminated
*no tariffs
Free Trade Zones extra info
term used in the Dominican Republic - near international airports, seaports, or land borders
*ease of export
Export Processing Zones
where special regulations benefit foreign controlled businesses
*labor is cheaper and environmental restrictions are relatively weak
Export Processing Zones extra info
called maquiladoras and in Mexico - near international airports, seaports, or land borders
*ease of export
international division of labor
a system of employment in the various economic sectors spread throughout the world
international division of labor extra info
break-up of primary, secondary, tertiary, quaternary, and quinary sector jobs either in core, semi-periphery, or periphery areas
Post-Fordist methods
adoption by companies of flexible work rules, such as the allocation of workers to teams that perform a variety of tasks