MS6 QUIZ#1

• Economic development is an extension of traditional economics and political economy
• Traditional economics focuses on efficient resource allocation and optimal growth of resources over time
• Political economy involves social and institutional processes through which economic and political elites influence resource allocation
• Economic development focuses on mechanisms to bring about rapid improvements in standards of living for the masses in developing nations
• Development economics is concerned with formulating public policies for economic, institutional, and social transformations
• Economic development leads to an improvement in economic welfare of the poorest segment of the population
• Development is measured by income per capita, GDP, and GNI
• Income per capita is total gross national income divided by total population
• GDP is the total final output of goods and services produced within a country's economy
• GNI includes GDP plus factor incomes accruing to residents from abroad
• Economic development aims for sustained growth of income per capita faster than population growth
• Alternative measures of welfare include the physical quality of life index (PQLI) and the Human Development Index (HDI)
• Three core values of development: sustenance, self-esteem, and freedom
• Sustenance includes basic goods and services necessary for an average human being
• Self-esteem is the feeling of worthiness promoted by social, political, and economic systems
• Freedom involves having a variety of alternatives to satisfy wants and real choices according to preferences
• Objectives of development
• Increase availability and widen distribution of basic life-sustaining goods
• Raise levels of living by providing more jobs, better education, and attention to cultural and human values
• Expand economic and social choices by freeing individuals and nations from servitude and dependence
• Historical view of economic development
• Capitalism rose in the West from the 15th to 18th centuries with the decline of feudalism
• Economic growth primarily occurred in capitalist West and Japan in the last century
• Japanese, South Korean, and Taiwanese approaches emphasized government-business cooperation and interventions for economic development
• The 1917 communist revolution in Russia provided an alternative to capitalism for economic modernization
• Soviet centralized socialism transformed Russia by taking control of economic planning and capital accumulation
• Major sources for rapid growth in Russia were exhausted before the collapse of communism in 1991
• Economic growth of developing countries since World War II has been rapid, but not faster than developed countries
• Growth of developing countries since 1980: East Asia grew the fastest, sub-Saharan Africa the slowest
• Eight high-performing Asian economies experienced rapid growth in the last decades of the 20th century
• Some sub-Saharan African countries experienced a slowdown and "meltdown" since 1990
• In September 2000, 189 United Nations member countries adopted eight Millennium Development Goals (MDGs) to eradicate poverty and achieve human development goals
• MDGs acknowledge the multidimensional nature of development and poverty alleviation
• MDGs focus on eradicating extreme poverty and hunger, achieving universal primary education, promoting gender equality, reducing child mortality, improving maternal health, combating diseases, ensuring environmental sustainability, and developing a global partnership for development
• Poverty is a state where a person or community lacks financial resources for a minimum standard of living
• Factors of poverty include lack of access to critical services, socioeconomic status, gender, ethnicity, and geography
• Primary causes of poverty include unemployment, education, inflation, poor resource utilization, poor governance, overpopulation, epidemic disease, debt, corruption, extreme weather, lack of local food control, lack of education access, mental illness, world hunger, and automation
• Historical causes of poverty include slavery, war, and conquest
• Types of poverty: situational, generational, absolute, relative, urban, and rural poverty
• Effects of poverty include emotional and social challenges, acute and chronic stressors, cognitive lags, and health and safety issues