ECONOMIC DEVELOPMENTEssential Questions:

1. How do economists measure a country’s level of economic development?

2. Which economic activities are most clearly associated with different levels of development?

INDICATORS OF ECONOMIC DEVELOPMENT

The Human Development Index (HDI) was developed by the United Nations (UN) to rank countries based on their level of economic development. Demographic Indicators

Life Expectancy: AVG # of years an individual is expected to live.

Size of the population Birth Rate: Births per 1,000. Mortality Rate: High birth and mortality rates reflect

higher poverty and lower health care quality. Infant Mortality Rate: Infant deaths per 1,000 births.

Reflective of level of medical care available when an infant is born. The lower the rate, the more developed medical care.

LEVELS OF ECONOMIC DEVELOPMENT Economic Development refers to how

advanced an economy is. Less Developed Nations:

High birthrate and infant mortality rate Increasing population size Low Gross Domestic Product (GDP) per capita and literacy

rate. More Developed Nations: US/France

Low birthrate and infant mortality rate Stable population growth High Gross Domestic Product (GDP) per capita and

literacy rate. Newly Industrialized: Emerging economies

moving from less developed to more developed. China/Thailand

ECONOMIC INDICATORS Indicators tell how well an economy is

performing. GDP per capita (GDP/# of people): reflects

the value of goods/services produced in a year in a nation by an AVG person.

SOCIAL INDICATORS Include social services provided to citizens.

Literacy Rate: % of people who can read/write % of people attending colleges/universities Housing, water supply and sanitation

TYPES OF ECONOMIC ACTIVITIES

Primary: Agricultural and mining 3% of US labor force is engaged in this arena.

Secondary: Manufacturing Iron ore changed into steel and shaped into railroad

tracks; tree logs assembled into furniture. Tertiary: Services

80% of US workers serve in this area. Includes teachers, accountant, truck drivers and musicians.

Quaternary: Management and information processing. Involved in information processing. Include

computer programmers or a general manager of a company.

EXAMPLE OF ECONOMIC ACTIVITIES

Primary—GRAPESSecondary—WINETertiary—SELLING THE WINE

Quaternary—RESEARCH OF THE EFFECTS

STOP

REVIEW Which type of economic activities would most

likely be found in a newly industrialized country with commercial industry?

A. Primary activitiesB. Secondary activitiesC. Tertiary activitiesD. Quaternary activities ANSWER: B

REVIEW CONT’D Which characteristic is typical of a less

developed country?

A. Government does not interfere in the economy.

B. Entrepreneurs play a key role in the nation’s economy.

C. There is a high infant mortality rate and a short life expectancy.

D. There is a high literacy rate and a long life expectancy.

ANSWER: C

REVIEW CONT’D A newly industrialized nation is usually

characterized by having-

A. A large number of workers engaged in manufacturing

B. Most people engaged in subsistence agriculture

C. A lack of human resources like skilled and unskilled labor

D. Most of its workers engaged in quaternary economic activities

ANSWER: A