Ib Economics: Development

Front 1

Infrastructure

Back 1

the essential facilities and services such as roads, airports, sewage treatment, water systems, railways, telecommunications, and other utilities that are necessary for economic activity.

Front 2

Corruption

Back 2

dishonest exploitation of power for personal gain, which challenges growth and development

Front 3

Capital Flight

Back 3

when money and other assets flow out of a country to seek a safe haven in another country.

Front 4

Human Capital Flight

Back 4

emigration of educated workers and talented individuals from one country to another.

Front 5

Non-Convertible Currencies

Back 5

can only be used domestically and are not accepted for exchange

Front 6

Relative Poverty

Back 6

They do not reach some specified level of income

Front 7

Absolute Poverty

Back 7

Basic necessities for survival and the amount a person needs of them to live.

Front 8

Poverty Cycle (growth)

Back 8

low economic growth > low incomes > low savings > low investment

Front 9

Poverty Cycle (development)

Back 9

low education and health care > low human capital > low productivity > low income.

Front 10

Harrod-Domar Growth Model

Back 10

rate of growth of GDP = savings ratio/ (Capital/output ratio)

Front 11

Structural Change/Dual Sector Model

Back 11

moving the labor of one sector into a smaller sector.

Front 12

Export-led growth

Back 12

outward oriented growth strategy, based on openness and increased international trade--- increasing exports.

Front 13

Import Substitution

Back 13

developing country should produce goods domestically rather than import them --domestic industries will grow, as will economy.

Front 14

Foreign Direct Investment

Back 14

long term investment by private multi-national corporations in countries overseas.

Front 15

Humanitarian Aid

Back 15

given to alleviate short-term suffering, which may be caused by war, draught, or natural disasters.

Front 16

Types of humanitarian aid

Back 16

food, medical, emergency

Front 17

Development aid

Back 17

alleviates poverty in the long run and improves welfare

Front 18

Long Term Loans/Soft Loans

Back 18

repayable over 10-20 years
-low interest rates

Front 19

Tied Aid

Back 19

given to a developing country but on condition that they spend it on goods and services from the donor country.

Front 20

Project Aid

Back 20

given for specific project in a country, given in the form of a grant aid that requires no repayment.

Front 21

Technical Assistance

Back 21

raises level of technology by bringing in foreign technology and technicians. Raises the quality of human capital by provision of training facilities and expert guidance.

Front 22

Commodity Aid

Back 22

given by countries to increase productivity in developing countries--provides funds to purchase commodities including consumer items intermediate inputs, and industrial raw materials.

Front 23

Bilateral Aid

Back 23

given directly from one country to another

Front 24

Multilateral Aid

Back 24

given by rich countries to international aid agencies---they decide where it goes.