AP HuGeo U7: Economy

(Gross Domestic Product)

→ Value of goods and services produced within a countryGNI

GNI (Gross National Income)

→ Total income earned by a country’s people (including abroad)

GNP (Gross National Product)

→ Similar to GNI; value of goods/services produced by a country’s people

PPP (Purchasing Power Parity)

→ Compares how much goods cost in different countries (cost of living)

GDP per capita

→ GDP divided by population; shows average standard of living

Why is per capita important?

→ It shows how wealthy people actually are, not just total country wealth

Formal Sector

→ Government-regulated, taxed jobs

Informal Sector

→ Unregulated, untaxed jobs (street vendors, day labor)

Where is informal sector most common?

→ Less developed countries (LDCs)

Energy Consumption

→ Amount of energy used by a country

What does high energy consumption indicate?

→ High development and industrialization Income Inequality

Gini Coefficient

→ Measures income inequality (0 = equal, 1 = unequal)

High Gini Coefficient

→ Large gap between rich and poor

Low Gini Coefficient

→ More equal income distribution

Fertility Rate (TFR)

→ Average number of children per woman

TFR in MDCs vs LDCs

→ MDC = low, LDC = high

Infant Mortality Rate (IMR)

→ Deaths of infants under age 1

IMR in MDCs vs LDCs

→ MDC = low, LDC = high

Life Expectancy

→ Average lifespan

Life Expectancy in MDCs vs LDCs

→ MDC = high, LDC = low

Literacy Rate

→ % of people who can read/write

Literacy in MDCs vs LDCs

→ MDC = high, LDC = lower

Gender Inequality Index (GII)

→ Measures gender inequality (0–1)

GII factors

→ Reproductive health, empowerment, labor participation

High GII means:

→ More gender inequality, less development

Human Development Index (HDI)

→ Measures overall development (quality of life)

4 components of HDI

→ GNI per capita

→ Life expectancy

→ Expected years of schooling

→ Mean years of schooling

Why is HDI better than GDP?

→ Includes health, education, and quality of life—not just money

MDCs (Core countries) Patterns

→ High GDP per capita, high energy use, low TFR, low IMR

LDCs (Periphery countries) Patterns

→ Low GDP per capita, low energy use, high TFR, high IMR

Semi-periphery countries

→ More secondary (manufacturing) jobs

As development increases…

→ TFR decreases

→ IMR decreases

→ Life expectancy increases

→ Literacy increases