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22 Cards in this Set
- Front
- Back
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Three types of strategies |
-market orientated -interventionist -other |
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6 market orientated strategies |
-trade liberalisation -promotion of FDI -removal of gov subsidies -floating exchange rate -micro finance schemes -privatisation |
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Market orientated strategies |
Using the free market to achieve growth and development |
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Trade liberalisation, what is it and pros and cons |
Removal of trade barriers, utilises comparative advantage and increased efficiency, however infant industries aren’t protected |
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3 Benefits and problems of FDI |
-increased employment -transfer of skills -more trade •corruption? •soft power •managers and important employees come from abroad |
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How removing subsidies improves development |
-frees up money to be spent elsewhere, improves firms efficiency |
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2 advantages and 4 disadvantages of floating exchange rates |
~currency may depreciate and make exports cheaper ~weaker currency encourages FDI -higher import prices-higher cost of essentials and higher cost of parts of production -volatility creates instability -weaker currency may fail to boost exports if demand is price inelastic |
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Microfinanve schemes, definition, 3 positives and 2 negatives |
Providing poor families with small loans to help grow businesses or expand farms etc -far lower interest rates than banks -money can be reinvested again and again -loans can empower women ~Only reaches a small proportion of society ~doesn’t stimulate infrastructure |
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3 benefits and 3 negatives of privatisation for development |
-increased competition, increased efficiency, decrease prices -incentive to make higher quality goods -more innovation and shift LRAS ~corruption, gov sell to friends ~privatisation can lead to monopoly ~essential services are privatised which makes them hard for those in poverty to access |
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6 interventionist strategies |
-development of human capital -protectionism -managed exchange rates -infrastructure development -promotion of joint ventures -buffer stock schemes |
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Interventionist strategies |
The government plays a leading role regulating and manipulating markets to provide economic growth |
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What is development of human capital and 3 pros and cons |
investing in education access and quality -increased skills raises productivity levels -attracts FDI -helps a country move away from primary products ~the cost to the gov ~inelastic supply of teachers ~gender inequality |
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3 pros and cons of protectionism |
-promotes import substitution -protects infant industries - developed countries are protectionist so levels playing field ~Firms become inefficient ~distorts theirs and others comparative advantage making imports more expensive ~WTO rules |
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3 advantages and 3 disadvantages of infrastructure development |
-lots will never be privately profitable eg roads so gov need to do it -cuts transport costs for firms -attracts FDI ~huge cost ~time lag ~landlocked countries, problem isn’t in their hands |
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Joint venture, definition and 2 pros and cons |
Association of two or more major businesses for the purpose of engaging in a specific enterprise for profit eg jaguar Land Rover in China -transfer of skills -better than FDI as profit remains in country ~difficult combining two working culture ~ hard to let both parties gain equally |
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Buffer stock scheme, how it works and 2 pros and cons |
Scheme to reduce price fluctuations, when the price is low the government buy goods and stockpile then sell when price is high -price stability for producers, more investment and employment -consumers are guaranteed price for necessities ~huge storage costs ~success depends upon firms being lawful- many aren’t |
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D |
-industrialisation -development of tourism -development of primary industry -fair trade schemes -aid -debt relief |
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Define Lewis model and 2 pros and cons |
Lewis model=movement of labour from agriculture to industrial urban sector -little cost of transferring workers -possibility of FDI ~industrialisation is often capital intensive rather than labour intensive ~migrants have lack of skills in industry and move to cities and end up unemployed |
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Define fair trade schemes and 2 pros and cons |
Aim to address the injustice of low prices by guaranteeing the producers revive a fair price by charging more for the goods in developed countries -removes monopsony power of large firms that cause low prices -extra money can be used to make company more efficient ~distortion of market forces, low prices are because of over production so should be deincetivised to continue to produce ~x inefficiency |
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Define aid and 2 pros and cons |
Transfer of resources or loans at low rates, unilateral or bilateral -improved health and education -infrastructure spending ~markets are dumped with foreign goods, industries can’t develop and lose customers ~dependency |
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What is debt relief and 2 pros and cons |
Forgiving countries for money they owe to allow them to spend elsewhere -frees up money for development -gives them foreign currency to buy capital goods ~moral hazard ~debt burden is taken by taxpayers in loan giving country |
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Examples |
Back (Definition) |
