Economic Development Economics Chapter 18

Levels of Development Economists use data to compare the economies of nations and how the economy impact people’s standard of living. Miniature Earth Video

Levels of Development Developed Nation Market Economy Relatively high standard of living High GDP Industrialization Widespread private ownership of property Stable & effective government Example: United States

Levels of Development Transitional Economy A country that has moved or is moving from a command economy towards a market economy Example: China

Levels of Development Less Developed Countries (LDC) Less well developed industry Lower GDP Lower standard of living Lack of infrastructure Basic support systems needed for an economy to run.

Standards of Economic Development Economists use data to measure levels of economic development. Per Capita GDP – a measure of a country’s wealth per person

Standards of Economic Development Infant Mortality Rate - The number of children who dies in the first year per 1,000 live births. Life Expectancy – Average lifespan of a person. Literacy Rate – Percentage of people over 15 who can read and write Human Development Index (HDI) – Combination of other stats including per capita GDP, literacy rate, student enrollment.

Standards of Economic Development Consumption of Goods & Services How people spend their money after meeting their needs. Bigger ticket items such as appliances indicate a more developed economy as well as an increasing standard of living. Energy Use Energy use is an indicator of the level of economic development. This includes individual use as well as how energy use differs between commercial and private use.

Standards of Economic Development Labor Force The types of jobs available indicate level of economic development.

Questions Why is per capita GDP more useful than overall GDP when comparing nations? What does a nation’s infrastructure say about the country’s level of economic development? Compare and contrast three characteristics of a developed nation and a less developed nation.

A Framework for Development Chap 18 Section 2

What is needed for a nation to develop? Resources Natural resources Human Capital Physical Capital Stability Government Institutions Stable Prices Protected Property Rights

What is needed for a nation to develop? Opportunity Open International Trade Social and Economic Mobility Control Corruption Limit Regulation Financial Support Internal Investment Foreign Investment Loans and Aid International Help Agencies

Challenges of Transitioning to a Market Economy Poor Infrastructure Privatization Rise in Prices

Market Transition Examples Russia and Eastern Europe (pg. 564-565) China (pg. 566-567)

China’s Campaign for Economic Power Read the Background and Issue on page 570 of the text. Review the documents provided. Answer questions 1 – 3 in a group of 2 -3 people.