Economic Development Chapter 18. Economic Development Refers to how advanced an economy is. Industrialized or More Developed Nations have advanced economies.

Economic Development

Chapter 18

Economic Development• Refers to how advanced an

economy is. • Industrialized or More Developed

Nations have advanced economies and higher standards of living• First World, highly developed,

developed

• Less Developed Nations have less advanced economies and lower standards of living• Third World, Underdeveloped

• Countries in the middle of this spectrum are considered “emerging economies” or “newly industrialized nations”• developing

Indicators of Development

• Human Development Index developed by the United Nations and is used to rank countries based on level of economic development

• Considers demographic, economic, social, and political indicators.

Demographic Indicators

• Relate to population• Life Expectancy

• Average number of years an individual is expected to live.• Birth and Death Rates

• How many people are born and die for every thousand people in a given year.

• Low Birth/Death rates-developed countries-• High Birth/Death rates-developing countries

• Infant Mortality Rate• Number of infants that die for every thousand born.

Demographic IndicatorsMore Developed Nations• Low Birth Rate

• Low Death Rate

• Low Infant Mortality Rate

• Long Life Expectancy

Less Developed Nations• High Birth Rate

• High Death Rate

• High Infant Mortality Rate

• Shorter Life Expectancy

Economic Indicators

• Show how well an economy is performing.

Gross Domestic Product (G.D.P.)

• The total value of all goods and services produced by a nation in a year within its borders.

Gross Domestic Product per capita

• G.D.P./number of people.• Value of goods and

services produced in a year in a nation by an average person.

• Other indicators include number of cars, phones, televisions and computers.

Economic Indicators Cont.

More Developed Nations• High G.D.P. per capita.

• Higher standard of living

• More productivity because of machinery, computers, and other high-tech tools.

Less Developed Nations• Low G.D.P. per capita

• Concentrate on agriculture

• Lack investment

• Less productivity and competition

Social Indicators

• Measure social services provided to a nation’s citizens

• Literacy Rates• Percentage of people who can read

and write• Percentage of people attending

places of higher education.• Number of professional people

(Doctors, Lawyers, etc).• Housing• Water Supply• Sanitation

Social Indicators

More Developed Nations• High literacy rate

• Greater percentage of people attending college and universities

• More doctors and hospitals

Less Developed Nations• Lower literacy rate

• Lower percentage of people attending college and universities

• Less doctors and hospitals

Political Indicators

• These indicators include:• Freedoms people

enjoy• Degree of

democracy and voting rights

• Level of human rights

• Degree of government opposition

• Tolerance for different points of view

Government Relation

• There is NOT a direct relationship between economic development and a nation’s system of government.

• A nation’s economic system could help transform its political system.

Economic Activities

• A nation’s level of economic development is closely tied to the types of economic activities occurring.

• More advanced economic development = More advanced economic activities.

• Four Main Groups

Primary Economic Activities

• Involve the production of foods and the extraction of natural resources.• Agriculture, mining,

logging, fishing, etc.• First-Level• In a less developed

country most people will engage in primary activities.

Secondary Economic Activities

• Focus on manufacturing and production of goods, such as the making of textiles, furniture, and automobiles

• Second-Level• In developing nations

large numbers of people are engaged in secondary economic activities.

Tertiary Economic Activities

• Deal with services• Third-Level • Identified by a

variety of services performed by people and businesses

Quaternary Economic Activities

• Consist of those involving information processing and management

• Fourth-Level• In more developed

nations the majority of workers are engaged in tertiary or quaternary economic activities.