ECON313-chap3

ECON313-chap3 - ECON313 - Chapter 3 Definitions Autarky a...

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ECON313 - Chapter 3 Definitions Autarky – a closed economy that attempts to be completely self-reliant Average product – total output or product divided by total factor input (ex. The average product of labor is equal to total output divided by the total amount of labor used to produce that output) Capital-labor ratio – the number of units of capital per unit of labor. In traditional neoclassical growth theory, lower capital-labor ratio in LDCs should mean higher returns to new investment and greater flows of capital from MDCs to LDCs. Capital-output ratio – a ratio that shows the units of capital required to produce a unit of output over a given period of time. Center – in dependency theory, the economically developed world. Closed economy – an economy in which there are no foreign trade transactions or other economic contacts with the rest of the world. Comprador groups – a local labor recruiter or purchasing agent employed by a foreign firm. Dependence – a corollary of dominance; a situation in which the LDCs have to rely on developed- country domestic and international economic policy to stimulate their own economic growth. Dependence can also mean that the LDCs adopt developed-country education systems, technology, economic and political systems, attitudes, consumption patterns etc Dominance – in international affairs, a situation in which the developed countries have much greater power than the less developed countries in decisions affecting important international economic issues, such as the prices of agricultural commodities and raw materials in world markets. Dualism – the coexistence in one place of two situations or phenomena that are mutually exclusive to different groups of society. Ex. Extreme poverty and affluence, modern and traditional economic sectors, growth and stagnation, and university education among a few and mass illiteracy. False-paradigm model – the proposition that developing countries have failed to develop because
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ECON313-chap3 - ECON313 - Chapter 3 Definitions Autarky a...

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