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.

Long-run Economic growth
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An increase in national output resulting from an increase in aggregate supply. If GDP rises because the nation’s resources became more productive or more abundant, then the full employment level of output will increase, indicating that such growth in sustainable, and most likely characterized by low inflation (i.e. stable price levels).

Long-run Economic growth
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)
Terms of Trade
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The ratio of an index of a nation’s export prices to its import prices. An improvement in the terms of trade means export prices have risen relative to import prices. A worsening means import prices have risen relative to export prices.

Terms of Trade
Production possibilities curve
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A graph that shows the various combinations of output that the economy can possibly produce given the available factors of production and the available production technology.

Production possibilities curve
Development
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Improvements in standards of living of a nation measured by income, education and health

Development
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
Dumping
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The practice of producers in one nation selling their output at a price lower than their costs of production in another nation. Considered a justification for protectionism by the World Trade Organization.

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

Foreign Direct Investment (FDI)
Productivity
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The output per unit of input of a resource. An important determinant of the level of aggregate supply in a nation. Will increase as a result of better or more capital, education and health, all which add to the human capital of a nation.

Productivity
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)

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