October 1 Domestic Economy

October 1 Domestic Economy - October 1, 2007 Domestic...

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Domestic Economy Necessary definitions – GDP (Gross Domestic Product) – the value of all goods and services produced in the country, valued at “factored cost” (adjusting for indirect taxes and subsidies) GNP (Gross National Product)- gross domestic product at factor cost plus any income received from abroad National Income- resources available for current use after setting aside sufficient to maintain the nations stock of capital equipment Problems with these Definitions: unreliability of official figures 1. may be inflated (to make country look better) 2. may be deflated (to look for more foreign aid) figures are average 1. doesn’t show economic inequality rate-of-exchange—converted to a common standard (usually $) Characteristic of a 3 rd World Domestic Economy High Agriculture, Low Manufacturing Unskilled labor (no skills from education or useful for machinery) Technology is inadequate/inappropriate (cell phones all over Africa) High inflation rates + low interest rates= no savings Absolute poverty- lacking basic human necessity undernourishment high infant mortality (2/10) <10% kids vaccinated life expectancy at year 1= 40 years old 1/3 are illiterate <50% complete 3 years of primary school 70-80% living in rural areas, but majority of government spending in city disproportionately affects women Does Money=Well Being? Measures like PQLI and HDI show that there is a slight correlation between increased GNP and increased human standards, but it’s not perfect No definite link between income increase and human development Development What is it? Increase in GNP
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This note was uploaded on 04/03/2008 for the course SOC 270 taught by Professor Barra during the Fall '07 term at Rutgers.

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October 1 Domestic Economy - October 1, 2007 Domestic...

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