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Economic development- study of how economics transformed from stagnation to growth and low-income to high-income status, and overcome problems of absolute poverty.oEfficient allocation of existing scarce productive resources and with their sustained growth over time, it deals with the economic, political, and institutional mechanisms.Limitations of GNI- it doesn’t account for stuff made in your country by a foreign country. It doesn’t actually show how people are living. Their quality of life may be better off than the math is suggesting. Money does not equal production. oGNI- total domestic and foreign output claimed by residents in the country. It comprises GDP plus factor incomes accruing to residents from abroad, less the income earned in the domestic economy accruing to persons abroad.What is PPP GNI? Does it improve on traditional methods of income comparison across countries? oPPP (Purchasing power parity) – calculation of GNI using a common set of international prices for all goods and services, to provide more accurate comparisons of living standards.oPer capita GNI comparisons between developed and less developed countries like those shown, however, exaggerated by the use of official foreign-exchange rates to convert national currency figures into U.S dollars. Does not measure the relative domestic purchasing power of different currencies. What are the main characteristics of developing countries? (Know the relationships between income and literacy, health, poverty etc)oHealth and economic welfare of people in poor rural families and many other regions will in one way or another, directly or indirectly, affect the health and economic welfare of families in Europe and North America.
What are the five stages of economic development according to Rostow? Describe each briefly.oA theory of economic development, the transition from underdevelopment to development can be described in terms of a series of steps or stages through which all countries must proceed.o1.traditional society – agriculture is the most important industryo2. Preconditions for takeoff into self-sustaining growth – societies formo3. The takeoff – social overhead capital, surge of technological development in both industry and agriculture.