1. Developing Countries CHAPTER 17 SECTION 1: Economic Development
Holt Economics
4/21/2017
CHAPTER 17
Developing Countries
SECTION 1: Economic Development
SECTION 2: Challenges to Growth
SECTION 3: Paths to Economic Development
Chapter 17

2. Objectives: Economic Development SECTION 1
What characteristics do developing countries have in common?
How can scarcity of resources affect a developing nation?

3. Characteristics of developing countries:
SECTION 1
Economic Development
Characteristics of developing countries:
low per capita GNI
limited or insufficient use of resources
high population growth rate
dependence on agricultural production

4. Potential effects of resource scarcity on a developing nation:
SECTION 1
Economic Development
Potential effects of resource scarcity on a developing nation:
inability to compete in the global marketplace
inability to trade
limited economic growth
dependence on a subsistence agriculture

5. Objectives: Challenges to Growth SECTION 2
How do many developing countries respond to scarce factors of production?
How can the status of an economic infrastructure help or hinder a developing country?
How can political instability challenge a developing nation?

6. Many developing countries’ response to scarce factors of production:
SECTION 2
Challenges to Growth
Many developing countries’ response to scarce factors of production:
specialization in the production of goods
increased spending on primary and secondary education
nationalization, expropriation, and privatization of industries and businesses

7. Impact of an economic infrastructure on a developing country:
SECTION 2
Challenges to Growth
Impact of an economic infrastructure on a developing country:
can limit or expand development
can discourage or promote production and trade
can restrict or improve development of human resources
can discourage or encourage savings and investment
can lead to nationalization, expropriation, and privatization of industries and businesses

8. Potential effects of instability on a developing nation:
SECTION 2
Challenges to Growth
Potential effects of instability on a developing nation:
can discourage foreign investment
can disrupt normal business activity
can destroy capital investment
can restrict economic development

9. SECTION 3
Paths to Economic Development
Objectives:
What are the characteristics of the socialist and capitalist models of decision making?
What types of aid do governments extend to developing countries?
What are the key public sources of foreign aid?

10. Characteristics of the socialist model of decision making:
SECTION 3
Paths to Economic Development
Characteristics of the socialist model of decision making:
ability of government to direct and redirect resources and production toward specific economic goals
inefficiency
bureaucratic resistance to change
corruption

11. Characteristics of the capitalist model of decision making:
SECTION 3
Paths to Economic Development
Characteristics of the capitalist model of decision making:
freedom to make economic decisions
difficulty in redirection of resources and production toward specific economic goals

12. Types of aid governments extend to developing countries:
SECTION 3
Paths to Economic Development
Types of aid governments extend to developing countries:
economic assistance
military aid
emergency assistance

13. Key public sources of foreign aid:
SECTION 3
Paths to Economic Development
Key public sources of foreign aid:
the World Bank
the International Monetary Fund
the United Nations
regional organizations

14. CHAPTER 17
Wrap-Up
1. How is per capita GNI used to classify developing nations?
2. What are developing nations’ three major obstacles to capital formation?
3. Why is scarcity a problem for developing nations?
4. How can leaders influence economic growth and development in a nation that uses the capitalist decision-making model?
5. Provide an example of each of the following: economic assistance, military assistance, and emergency assistance.