APHG Unit 7

quaternary economic sector

Knowledge-based sector, focusing on research and information creation and transfer.

Tertiary Economic Activities

Service sector that focuses on moving, selling, and trading products in primary and secondary sectors. 

1. Examples include: retail, marketing, design, restaurants, shipping 

Quinary Economic Activities:

 Highest levels of decision making, includes top officials in government and business. 

1. Examples include: Congress, CEOs

Agglomeration

• • Similar businesses cluster in the same area.  

  • Businesses support each other, reduce costs

Bulk Reducing Industry

“Material Orientation”

factory located near raw materials

Examples: copper, steel, lumber

Bulk Gaining Industry
“Market Orientation”

factory locate near market

ex. automobiles, beverages

break-of-bulk points

sea ports, airports, railroad stations that ship and deliver bulk quantities of unpackaged goods like coal or timber

Gross National Product (GNP)

goods + services of a country as well as foreign investments in a given year.

Gross domestic product (GDP)

total goods + services within country’s border in a given year

location of where goods are produced

Gross National Income

total income earned by a country’s labor force

Most accurate measure of wealth

GDP + (exports-imports) = GNI

formal sector

every business that is incorporated and registered according to state and national laws

informal sector

economic activity that operates outside the boundaries of government oversight

ex. getting paid with cash for babysitting, undocumented migrant workers

Human Development Index (HDI)

• Score between 0 and 1

• closer to 1 the better

• MORE accurate

• Combines health, education, and living standards

microloans

provided opportunities for women to create small local businesses which have improved standards of living since they invest more money into families

semi-periphery countries

• Brazil, Russia, India, China, South Africa, Mexico

dependency theory

core countries need to exploit to be economically successful

peripheral countries can’t survive without submitting to being exploited

complementary advantage

countries trade with one another because no one country can create all the goods it needs for economic flourishing

comparative advantage

when a country specializes in producing a certain good because they are more efficient/equipped than anyone else in producing those goods

neoliberalism

movement to promote free trade and reduce government intervention in trade relationships

World Trade Organization 

To ensure that “trade flows as smoothly, predictably, and freely as possible”

To Eliminate/Reduce Barriers to Trade

Operates a global system of trade rules

Mercosur

• Southern Common Market

• Argentina, Brazil, Paraguay, Uruguay 

• Creating business & investment opportunities by integrating national economies into international market

OPEC – Organization of Petroleum Exporting Countries

42% of the world’s oil production

67% of the world’s oil reserves

They regulate the SUPPLY of oil NOT the price – price determined by supply & demand

international monetary fund

solution to financial crisis

promotes economic development by restructuring a country’s loan payments or overhauling their entire economy

Fordism

an economy structured around mass consumption and the mass production of standardized manufactured goods

offshore outsourcing

process where companies are increasingly moving production to places outside the country in which they are headquartered

ex. U.S have established customer service call centers in the Philippines and India, respectively, where lower wages and English-language use make this outsourcing effective.

Special economic zone (SEZ)

sector within a country where business and trade laws are different from other countries to attract foreign investment

export processing zone

subtype of SEZ

lower taxes

less strict labor laws

attracts multinational corporations to invest in factories

free trade zone (FTZ)

subtype of SEZ

designated tax free

post fordism

companies have parts of their products manufactured, assembled, and sold in different countries,

multiplier effect

creating one job simultaneously creates more jobs

GNI per capita

Divides GNI by country’s population

Shows average citizen's’ individual income

What does HDI measure?

• life expectancy

• Expected year of schooling

• GNI per capita

1st stage of Rostow’s Stages of Development

TRADITIONAL SOCIETY

• rural

• primary sector activities (farming, fishing, hunting) for subsistence farming

• limited technology

2nd stage of Rostow’s Stages of Development

PRECONDITIONS TO TAKE OFF

• Start of urbanization & industrialization

• Shift to secondary economic sector

3rd stage of Rostow’s Stages of Development

TAKE OFF

• Urbanization

• Advancements in Technology

• Major export industry

• Full industrialization

ex. India, Philippines

4th Stage of Rostow’s Stage of Development

DRIVE TO MATURITY

• Population growth declines

• Improved transportation & communication system

• Investment in social infrastructure (schools, hospitals, etc)

• Widespread education

5th Stage of Rostow’s Stage of Development

HIGH MASS CONSUMPTION

• Population continues to decline

• Mostly tertiary (highly educated workforce)

• Spends money on nonessential goods

ex. U.S, Canada