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.

Indebtedness
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When a country owes money to lenders, generally foreigners, requiring a large percentage of any tax revenues collected to go towards servicing the national debt. Presents an obstacle to economic development since poor countries find they have little money left over for the provision of public goods to citizens.

Indebtedness
Foreign Direct Investment (FDI)
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Investment in factors of production abroad by multi-national corporations.

Foreign Direct Investment (FDI)
Globalization
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The emerging inter-connectedness of the world’s national economies and cultures

Globalization
Market system
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Market economic system: A system of resource allocation in which buyers and sellers meet in markets to determine the price and quantity of goods, services and productive resources.

Market system
More Economically Developed Country (MEDC)
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A term referring to a country in which the average income is above approximately $15,000 PPP per year, in which most people have access to health care and education. Includes most of Europe, North America, parts of Latin America and East Asia.

More Economically Developed Country (MEDC)
Sustainable development
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A system for achieving improvements in living standards which is able to endure over a long period, characterized by the use of renewable resources and other technologies that both improve living standards and protect the environment

Sustainable development
Soft loan
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Loans made by foreign governments or international financial institution to less developed countries at favorable interest rates, lower than those the country would have paid if borrowing from a private bank. Allows less developed countries to keep interest payments low while acquiring much needed financing for economic development projects.

Soft loan
Non-convertible currencies
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A barrier to economic development arising from a nation’s inability to convert its currency on foreign exchange markets, thus its inability to acquire the foreign capital it needs to achieve improvements in productivity, income and human welfare among its people.

Non-convertible currencies
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)
Debt cancellation
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See indebtedness. When international lenders from a more economically developed country (MEDC) who are owed money by a the government of a less economically developed country (LEDC),usually from loans taken out by corrupt governments in the past, forgive the debt they are owed. Allows for the limited tax revenues collected by the developing country’s government to be used to provide public goods and services (such as infrastructure, education and health care) which contribute to the poor country’s economic development.

Debt cancellation

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