4.8 Measuring Economic Development (DP IB Economics: HL): Flashcards
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Define a single indicator of development.
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Cards in this collection (39)
Define a single indicator of development.
A single indicator measures only one development characteristic within a country, such as GDP per capita.
Sustainable economic development occurs at the intersection of the economic, social and dimensions.
Sustainable economic development occurs at the intersection of the economic, social and environmental dimensions.
Define real GDP.
Real GDP is the value of all goods and services produced in an economy in a one-year period, adjusted for inflation.
How is GDP per capita calculated?
GDP per capita is calculated as GDP divided by the population, showing the mean wealth of each citizen.
True or False?
A single indicator measures several dimensions of development at the same time.
False.
A single indicator measures only one development characteristic, such as GDP per capita.
Define gross national income (GNI).
Gross national income (GNI) measures the income earned by a country's citizens operating outside the country, plus its GDP.
Why is real GDP per capita more useful than real GDP for comparing countries?
Because it takes population differences into account, giving a better measure of the income available per person.
Define purchasing power parity (PPP).
Purchasing power parity (PPP) is a conversion factor that calculates the relative purchasing power of different currencies to allow more accurate standard-of-living comparisons.
Why does adjusting for PPP make standard-of-living comparisons more accurate?
Because it accounts for the fact that goods and services cost different amounts in different countries.
True or False?
The 'viable', 'bearable' and 'equitable' overlaps are each fully sustainable in the long term.
False.
Each represents only a partial overlap and is not sustainable in the long term; true sustainability requires all three dimensions together.
Give two single indicators used to measure health.
Single health indicators include life expectancy and the infant mortality rate.
A typical single education indicator is the adult rate.
A typical single education indicator is the adult literacy rate.
Which single indicator is commonly used to measure income inequality?
The Gini coefficient is commonly used to measure economic inequality within a country.
Define a composite indicator of development.
A composite indicator combines several individual measures into a single index, such as the Human Development Index.
Define the Human Development Index (HDI).
The Human Development Index (HDI) is a composite indicator developed by the UN that combines health, education and income into a score between 0 and 1.
What three dimensions make up the Human Development Index?
The HDI combines health (life expectancy at birth), education (years of schooling) and income (real GNI per capita at PPP).
How are the three components weighted within the HDI?
Each of the three indicators is given equal weighting in the index.
The HDI ranks countries on a score between 0 and , where a higher score means greater development.
The HDI ranks countries on a score between 0 and 1, where a higher score means greater development.
The HDI ranks countries on a score between 0 and , where a higher score means greater development.
False.
The closer the score is to 1, the higher the level of economic development and the better the standard of living.
Define the Inequality-adjusted Human Development Index (IHDI).
The IHDI measures the level of human development once inequality is accounted for, falling below the HDI value as inequality rises.
What does the difference between a country's HDI and IHDI represent?
It represents the loss in potential human development due to inequality.
True or False?
The IHDI is equal to the HDI when there is no inequality in a country.
True.
The IHDI equals the HDI value when there is no inequality, and falls below it as inequality rises.
Define the Gender Inequality Index (GII).
The Gender Inequality Index (GII) measures gender inequality across three dimensions — reproductive health, empowerment and the labour market — on a scale of 0 to 1.
On the GII, does a lower or higher value indicate greater equality between men and women?
A lower value indicates greater equality between men and women.
Define the Happy Planet Index (HPI).
The Happy Planet Index (HPI) measures sustainable wellbeing by ranking how efficiently countries deliver long, happy lives using the earth's scarce resources sustainably.
What three variables does the Happy Planet Index use?
The HPI uses wellbeing, life expectancy and ecological footprint.
The HPI gives a higher score to countries with a lower footprint.
The HPI gives a higher score to countries with a lower ecological footprint.
Define a composite indicator.
A composite indicator combines several individual measures into a single index of development.
Why is it necessary to use a range of indicators to measure development?
Because economic development is multi-dimensional, so a range of indicators is needed to capture its many dimensions.
Give one advantage of using the HDI to measure development.
The HDI is a composite indicator that gives a more useful comparison than single indicators and incorporates health, education and income.
Why does the HDI fail to reflect inequality within a country?
Because it uses the mean GNI per capita, so it does not capture the inequality that exists.
Because gathering the data is difficult, development data often reality by several years.
Because gathering the data is difficult, development data often lags reality by several years.
True or False?
Composite indicators provide better insight into development than single indicators.
True.
Composite indicators provide better insight than single indicators, though single indicators are useful for targeting or prioritising one aspect.
Why can qualitative development data be unreliable?
Because it can be subject to bias and errors in interpretation, and may be influenced by political agendas.
Data collection and statistical reporting can be subject to political , so the data should be questioned.
Data collection and statistical reporting can be subject to political agendas, so the data should be questioned.
True or False?
Economic growth always leads to economic development.
False.
Growth usually precedes development, but not always; growth tied to one industry with negative externalities can even lower living standards.
How does the equity of income distribution affect economic development?
Where the equity in distribution is higher, development is greater; where it is lower, development is lower.
Give an example of development that did not simply follow economic growth.
Bangladesh used strategies such as micro-finance to transform quality of life, showing development need not always follow growth.
True or False?
Growth tied to a single industry can lower living standards even as output rises.
True.
Growth tied to one industry can generate negative externalities of production, decreasing living standards for many even as growth increases.
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