1. IV. Development, Trade, and Money Management

2. A. Economic Development
Economists use the concept of development to talk about a country’s economic well being
Development – economic growth or an increase in living standards
When studying development, we look at factors like people’s education, literacy, and life expectancy

3. Developed country – a country with a strong economy and a high standard of living, such as the United States.
only about 20 percent of the world countries are developed
developing country – a country with a less-productive economy and lower standard of living, such as Haiti

4. Economists use gross domestic product to measure a country’s economy
Gross Domestic Product (GDP) – total value of all goods and services produced in a country in a year.
Countries are always seeking to increase economic development

5. One way that a country can increase development is through productivity.
Productivity – the amount of goods and services produced compared to resources used
Another way to increase growth is by using technology
Technology – is the practical application of knowledge to accomplish a task
Unfortunately this is very expensive

6. B. Trade To get the products we need and want, we engage in trade.
Trade – is the exchange of goods and services in a market.
Trade benefits both the buyer and the seller.

7. All buying and selling that takes place within a country is known as domestic trade
trade with foreign nations is known as international trade.
international trade involves imports and exports

8. Import – Goods and services sold in a country that are produced in other countries
Export – good and services produced within a country and sold outside the country’s borders

9. Tariff – a tax on imports or exports
trade barrier – is a governmental policy or restriction that limits international trade
free trade – the removal of trade barriers

10. C. Money Management
Money is anything that is generally accepted as payment for goods and services.
Money is a scarce resource that people must manage to have enough for their needs and wants
People’s needs, wants, and incomes can change so it is important to plan ahead.

11. Budget – is a plan that shows income and expenses over a period of time.
a budget’s income should be equal or greater than its expenses
Saving – is that act of setting aside money for future use.

12. Many people save their money in banks
However, sometimes it may be necessary to borrow money from a bank through a loan
Interest – the price paid for borrowing money

13. Investing – is the act of using money in the hope of making a future profit
Stock – a share of ownership in a company
bond – a certificate issued by a company or government promising to pay back money with interest.