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.

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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.

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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.

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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.

Weath
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An important determinant of consumption. Refers to the total value of a household’s assets minus all its liabilities.

Weath
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The ability to endure over time. Sustainable growth requires that resources are used at a rate at which they are able to replenish themselves and the environment is not despoiled in the process of production.

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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.

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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”.

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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).

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A system of price controls used in a nation by which the government intervenes to keep the price above a minimum and below a maximum. Usually used in markets for agricultural commodities which can be stored for long periods of time. If the market price falls below a minimum level, the government will come in to buy up any surpluses, which get put into storage. If the price rises above a maximum level, the government will release its buffer stocks to keep the price low. Meant to assure stable prices to farmers and consumers of key food commodities.

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The value of labor created through education, training, knowledge and health. An important determinant of aggregate supply and the level of economic growth in a nation.

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