economic development

Created by

isobelle

Cards (14)

GNI is calculated by adding together: the total value of all the goods and services provided by its population and the income earned from investments that its people and businesses have made overseas
to compare the levels of economic growth using GNI:
divide it by the population to produce a per capita figure
convert to USA dollars to make the comparison easier
adjust each figure as in LICs money may go further than in HICs
countries are classified into three main economic groups according to their levels of economic development based on GNI per capita:
low income countries - LICs
newly emerging economies - NEEs
high income countries - HICs
LICs
low average incomes of 1045 US dollars or below
NEEs
roughly correspond with the 'middle income' group of countries, the number has grown rapidly in recent decades due to the spread of globalisation
HICs
high average incomes of 12,736 US dollars or above
LIC economy
agriculture still plays an important role in their economies - pre-industrial and primary industry
NEE economy
countries that have begun to experience higher rates of economic growth, usually due to rapid factory expansion and industrialisation - industrial and secondary industry
HIC economy
office work has overtaken factory employment - post industrial and tertiary and quaternary industries
LIC examples
Nepal
Mongolia
Somalie
NEE examples
South america
China
Russia
HIC examples:
UK
Germany
France
the majority of the HICs lie in the northern hemisphere, with the exception of Australia and New Zealand
limitations of using GNI as a measure of development:
can be a misleading picture of typical level of economic development
the mathematical mean can be misleading as one millionaire and 99 people would mean the mean would be 10,000 each
the value of the hard work of people in LICs and NEEs is not included in GNI data
it is all in US dollars, so does not allow for the relative spending power