Development Economics Flashcards

Only 10 flashcards are shown at a time! Once you’ve mastered these 10 Economic terms, click the shuffle button below for 10 new terms. There are approximately 45 flashcards covering Development Economics.

Human Development Index (HDI)
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A measure of the standards of living, used to rank countries based on their level of human development. It takes into account three primary variables: the level of GDP per capita, (as an indication of income levels), literacy (as an indication of education levels), and life expectancy (as an indication of levels of health). Countries are placed into one of four categories based on their HDI ranking: “very high human development”, “high human development”, “medium human development” and “low human development”.

Human Development Index (HDI)
Micro-credit
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The extension of very small loans (a few hundred dollars or less, typically) to borrowers in less developed countries meant to give small entrepreneurs access to simple capital. Has proven a successful strategy for economic development.

Micro-credit
World Bank
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An international agency which makes soft loans to less economically developed countries, mostly for infrastructure projects or other investments which improve the physical or the human capital of the developing country.

World Bank
Tied aid
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Aid given by a more developed country to a less developed country that comes with “strings attached”, e.g. the recipient nation must spend any of the money received on goods and services produced by the lending country.

Tied aid
The International Monetary Fund (IMF)
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An institution established to assure exchange rate stability and to assist in financial crises, to facilitate international trade and to promote high employment and economic growth in less developed countries.

The International Monetary Fund (IMF)
World Trade Organization (WTO)
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An organization aimed at liberalizing trade by facilitating the reduction or elimination of trade barriers between member states.

World Trade Organization (WTO)
Private sector
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Refers to the activities undertaken by the private households and firms in an economy. “Private sector spending” includes household consumption and investment by private, non-government-owned firms.

Private sector
Tragedy of the commons
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When there exists a common access resource, over which there is no private owner, the incentive among rational users of that resource is to exploit it to the fullest potential in order to maximize their own self gain before the resource is depleted. The tragedy, therefore, is that common resources will inevitably be depleted due to humans’ self-interested behavior, leaving us with shortages in key resources essential to human survival.

Tragedy of the commons
Globalization
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The emerging inter-connectedness of the world’s national economies and cultures

Globalization
Fair Trade
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A trade scheme which promotes better working and living conditions among the producers of primary commodities such as bananas and coffee in less developed countries. Attempts to assure that a larger percentage of the final sale price of such commodities makes it back to those who produced them.

Fair Trade

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