APHG Unit 7

I. Economic Sectors and Patterns

• Primary sector: Extracting natural resources (e.g., farming, mining).

• Secondary sector: Manufacturing and processing (e.g., factories).

• Tertiary sector: Services (e.g., retail, banking).

• Quaternary sector: Knowledge-based services (e.g., research, IT).

• Quinary sector: High-level decision-making (e.g., executives, government leaders).

• Formal economy: Regulated by the government, taxed.

• Informal economy: Not taxed or regulated (e.g., street vending).

II. Measures of Development

• Gross Domestic Product (GDP): Total value of goods and services produced within a country.

• Gross National Income (GNI): GDP plus income earned abroad.

• GNI per capita: Average income per person.

• Purchasing Power Parity (PPP): Adjusts income for cost of living.

• Human Development Index (HDI): Measures overall development (income, education, life expectancy).

• Gender Inequality Index (GII): Measures gender-based inequality.

• Developed countries (MDCs): High HDI (e.g., USA, Japan).

• Developing countries (LDCs): Lower HDI (e.g., Nigeria, Bangladesh).

III. Theories of Development

• Rostow’s Stages of Economic Growth:

  1. Traditional society

  2. Preconditions for takeoff

  3. Takeoff

  4. Drive to maturity

  5. Age of mass consumption

• Wallerstein’s World-Systems Theory:

  1. Core: Wealthy, industrialized nations (e.g., USA, Germany)

  2. Semi-periphery: In-between countries (e.g., Brazil, China)

  3. Periphery: Poor, less developed countries (e.g., Sub-Saharan Africa)

• Dependency theory: Periphery countries depend on core countries for development.

IV. Industrialization and Economic Geography

• Industrial Revolution: Shift to mechanized production in the 18th–19th centuries.

• Cottage industry: Small-scale, home-based production.

• Fordism: Mass production, assembly lines.

• Post-Fordism: Flexible production and specialization.

• Agglomeration: Businesses cluster for mutual benefits.

• Deglomeration: Businesses move apart due to costs or competition.

• Growth poles: Areas of economic development that attract related industries.

V. Location of Industry

• Weber’s Least Cost Theory: Industries locate to minimize three costs:

  1. Transportation

  2. Labor

  3. Agglomeration

• Bulk-reducing industry: Located near raw materials (e.g., copper smelting).

• Bulk-gaining industry: Located near markets (e.g., soda bottling).

• Footloose industry: Not tied to a specific location (e.g., software companies).

• Just-in-time delivery: Minimizes inventory by receiving goods only as needed.

• Outsourcing: Shifting jobs to outside suppliers (often overseas).

• Offshoring: Moving production to another country for lower costs.

VI. Trade and Economic Alliances

• Free trade: No tariffs or restrictions between countries.

• Tariffs: Taxes on imports.

• Export processing zones (EPZs): Areas in developing countries with relaxed laws to attract business.

• Special economic zones (SEZs): Zones with economic incentives (e.g., China’s Shenzhen).

• Maquiladoras: Factories in Mexico near the U.S. border that export goods.

• European Union (EU): Economic and political union.

• NAFTA/USMCA: Trade agreement among U.S., Mexico, and Canada.

• OPEC: Organization of oil-exporting countries.

VII. Sustainable Development and Equity

• Sustainable development: Development that meets present needs without harming future generations.

• Ecotourism: Tourism focused on conservation and local benefit.

• Microloans: Small loans to help people in developing areas start businesses.

• Gender equity: Fair access to opportunities regardless of gender.

• NGOs: Non-governmental organizations working in development (e.g., Red Cross).

• Fair trade: Ethical treatment of workers and fair prices for producers.