Growth & Less Developed Countries The International Economy

GDP per capita Value of final goods produced/total population IACs GDP among top 27 in the world Market economy based on technological advancement Well-educated labor LDCs ≈ 150 countries with low GDP Economy based on agriculture Uneducated labor

LDCs Poorest regions are S Asia and Sub-Saharan Africa

Quality-of-Life Indicators for Selected Countries, 2009 United States 46, % 99% 7,768 8 Japan 39, , China 3, , Bangladesh India 1, Egypt 2, Mozambique Country GDP per Capita Life Expectancy (years) Infant Mortality Rate (%) Literacy Rate (%) Per Capita Energy Consumption Economic Freedom Rank

Economic Growth/Development Abundant natural resources Investment in human resources Accumulation of capital Technological progress Political stability

Vicious circle of poverty The trap in which countries are poor because they cannot save and invest, but they cannot save and invest because they are poor

LDC Governments Need to Stabilize to Attract Foreign Investment Law & Order: legal system, monetary value, property ownership Infrastructure: transportation, communications, and education system International Trade: market exchange rates

AID Agency in charge of U.S. aid to foreign countries 1% of U.S. budget is spent on aid to foreign countries

World Bank Lending agency that makes long-term, low-interest loans and provides technical assistance to LDCs

IMF The lending agency that makes short-term conditional loans to developing countries