ECON 313- Chapter 1.
Attitude: A state of mind or feeling of an individual, group, or society regarding issues such as material gain,
hard work, saving for the future, and sharing wealth.
Capabilities: The freedoms that people have, given their personal features and their command over
Developing countries: the present countries of Asia, Africa, the Middle East, Latin America, eastern Europe,
and the former Soviet Union, mainly characterized by low levels of living, high rates of population growth, low
income per capita, and general economic and technological dependence on developed economies.
Development: the process of improving the quality of all human lives. Three equally important aspects of
development are (1) raising people’s levels of living – their incomes and consumption levels of food, medical
services, education etc. through relevant economic growth processes; (2) creating conditions conductive to the
growth of people’s self-esteem through the establishment of social, political, and economic systems and
institutions that promote human dignity and respect; and (3) increasing people’s freedom by enlarging the
range of their choice variables, as by increasing varieties of consumer goods and services.
Development economics: the study of how economies are transformed from stagnation to growth and from low-
income to high-income status and overcome problems of absolute poverty.
Freedom: a situation in which a society has at its disposal a variety of alternatives from which to satisfy its
Functionings: what people do or can do with the commodities of given characteristics that they come to
possess or control.
Globalization: the increasing integration of national economies into expanding international markets.
Gross national income (GNI): the total domestic and foreign output claimed by residents of a country. It
comprises gross domestic product (GDP) plus factor incomes accruing to residents from abroad, less the
income earned in the domestic economy accruing to persons abroad.
Income per capita: total gross national product of a country divided by total population. Per capita income is
often used as an economic indicator of level of living and development. It can, however, be a biased index
because it takes no account of income distribution and the owner ship of the assets that are employed to
generate part of that income.
Less developed countries (LDCs): = developing countries
Millennium Development Goals (MDGs): A set of eight goals adopted by the UN in 2000: to eradicate extreme
poverty and hunger, achieve universal primary education, promote gender equality and empower women,
reduce child mortality, improve maternal health, combat HIV/ AIDS, malaria, and other diseases, ensure
environmental sustainability, and develop a global partnership for development. The goals are assigned
specific targets to be achieved by 2015.
More developed countries (MDCs): = developed world: the now economically advanced capitalist countries of