Economic Development
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- Elizabeth Bridges
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1 Economic Development
2 Types of Economic Systems Traditional Command Market
3 Traditional Style 1. Subsistence farming farming for family consumption 2. Barter and trade 3. Rural areas, low technology \
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6 Cottage industries The making of handicrafts and handlooms forms the core of the cottage industries in India Pottery is an age old cottage industry in Bangladesh Watermelons village distribution center Dried catfish production drying racks in Myanmar
7 Command Economy 1. Central planning 2. Govt controls price/supply 3. Govt controls location of business 4. All citizens share What kind of government is this type of economic system usually associated with? Has it been successful?
8 Commercial/market/free enterprise a. People choose products to buy b. Driven by profit c. specialization even in agriculture. d. Work for money so you can buy goods e. interdependence
9 Draw this on your paper Traditional Market Command
10 Sort the following vocabulary into three categories: Traditional, Market, Command. Terms may appear in more than one column Entrepreneur Market Capitalism Barter Cottage industry Subsistence Free enterprise Equality Opportunity Cost Class Specialization Communism Socialism Innovation Stagnation Manufactured need Resource allocation Scarcity Choice Profit Incentive Competition Cooperative Common ownership Free association
11 Types of Economic Activity 1) primary a) Use natural resources on site (ex. Steel mill at an iron ore mine) Copper Mine Forestry
12 2) secondary a) Factories use materials (usually shipped to them) to produce something new b) Can be located on site
13 3) Tertiary a) Provide services b) Store clerks etc. c) Located where people are
14 4) quanternary a) process, administer, and disseminate information. b) used to describe "white collar" professionals working in education, government, management, information processing, and research. c) Can be located anywhere given the technology
15 How would you classify jobs at Blue Bell? Primary Secondary Tertiary Quaternary
16 Levels of Economic Development 1. Developed (more developed - MDC) and developing (less developed - LDC) 2. resources are uneven 3. Historical factors
17 5. Characteristics of Less Developed vs. Developed Countries
18 Less Developed Countries DO NOT have a high standard of living DO NOT have modern transportation DO NOT have good medical care Do NOT have adequate clothing The majority follow traditional ways of life Developed Countries High standard of living Modern transportation and communication infrastructure Good medical care Adequate clothing The majority follow modern ways of life This Nigerian woman is gathering water from a local pond, which is used as a source of drinking water. Credit: Photo by E. Staub, Courtesy of CDC and the Carter Center
19 More developed regions Anglo-America Eastern Europe South Pacific Less developed regions Latin America Southeast Asia South Asia Western Europe Japan East Asia Middle East Sub-Saharan Africa
20 What do the MDC s have in common? South Korea, Taiwan (ROC), Singapore, and Hong Kong s economies more developed than their neighbors economies. Why? Eastern European countries are considered MDC s but are also considered in transition. Why? What do the LDC s have in common? What are the concerns with labeling all of these regions the same?
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22 Human Development Index (developed by the UN) 1. Life Expectancy 2. Gross domestic product per capita 3. Literacy Rates
23 Demographic Indicators GDP Life Expectancy Literacy Infant Mortality unemployment What does each tell us about a country?
24 United States GDP per capita - $49,000 Life expectancy 79 Literacy 99% Infant mortality 6 Unemployment 9% Push or Pull factors?
25 Mexico GDP - $14,800 Life expectancy 77 Literacy 86% Infant mortality 17 Unemployment 5% Push or Pull factors?
26 China GDP - $8,500 Life expectancy 75 Literacy 92% Infant mortality 15 Unemployment 6.5% Push & Pull factors?
27 Haiti GDP - $1,300 Life expectancy 62 Literacy 52% Infant mortality 52 Unemployment 41% Push & Pull factors?
28 Ghana GDP - $3100 Life expectancy 61 Literacy 67% Infant mortality 15 Unemployment 11% Push & Pull factors?
29 IV. Globalization Globalization economic partnerships business to business or country to country For example: Exxon Mobil has branches on every continent each one may have a different purpose *Drilling US *Refining China *Communications India *Advertising - Europe
30 In the 1700 s, most were subsistence farmers The Industrial Revolution changed our production capabilities
31 Growth during the industrial revolution required natural resources Those with access to the most resources were the winners
32 2009 Data
33 Demand drives the market, if something breaks the chain then the global market will slow down
34 Developed countries demand began to slow in the 1970 s.. Developing countries consumers were far from markets and transportation/skills were inadequate Began OUTSOURCING
35 Outsourcing is sending low skill work to other countries because it s cheap - This keeps prices in developed countries lower Forces developed nations workers to increase skill level or be outsourced
36 All countries are competing now for markets and resources
37 2) Has led to conflict in some regions of the world. Golan Heights water Israel and the Palestinian crisis -- water along the Sahel-Saharan fringe -- close correlation between conflict and rainfall. There is competition over land for grazing in pastoral areas and, further south, conflict between farmers and pastoral communities. Somalia -- water and water points. Rwanda and Burundi, --agricultural land Chad -- agricultural land and pasture.
38 Darfur -- land and resources Cold War resources and markets Sierra Leone and Liberia coltan (which is needed to make electronic equipment) and diamonds Iraq and Kuwait oil Nigeria, Kurdistan, Niger and between South and North Sudan oil Spratly Islands oil Iraq vs Kuwait oil In Angola, civil war for money from diamonds, ivory, oil and other resources Etc.
39 Trade Blocs a) NAFTA US, Canada, and Mexico eliminating trade barriers
40 European Union (EU) trades within group and taxes imports from non members.
41 2) Transnational Corporations Operate factories in countries other than their headquarters
42
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44 Activity #2: How can less developed nations advance their standards of living? Scenario: A billion-dollar company is looking to invest and move its headquarters to one of these countries: Qatar, China, Botswana, Azerbaijan, Republic of Congo, Angola, East Timor, Iraq, Liberia, Afghanistan, Uzbekistan, or Turkmenistan. Form groups and have each group choose one of these countries to research the following information: average life expectancy, infant mortality rate and literacy rate. The students will present their information and discuss why their country offers the best opportunity to grow a business, and how the development of that country might be further promoted through social programs. Finally, (on their own paper) ask the students to make their choice for placing the new headquarters. Explain their reasoning. Also, suggest what social programs should be implemented to assist that country.
45 Activity#3: What is the connection between the levels of development and different types of economic activities? Have students define primary, secondary, tertiary and quaternary economic activities, and provide examples of each. Then ask students to research the main types of economic activities found in Mexico and classify them. What is Mexico s level of economic development? How did NAFTA change Mexico s typical economic activities? How are current concerns with drug trafficking affecting Mexico s economic development?
46 Activity #4: How does globalization affect you? Students will choose 25 items from their classroom or home and write down where these items are from around the globe. Identify the location of these items on a map indicating the possible paths these items took before arriving in the United States. Are there any trends? Predict the changes you think globalization will bring about in future.
2c. What has been happing to the gap between MDCs and LDCs in terms of GDP?
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