Lecture 17: Why Are Some Countries So Rich and Others So
Poor?
Characteristics of Rich Nations
•
stable democratic governments with a rule of law and respect for political, civil, and
economic rights
•
capitalist
•
committed to free trade
•
lots of investment in capital goods
•
well educated workforce with a long life expectancy
•
located away from the equator
•
well developed transportation and communication systems
Characteristics of Poor Nations
•
dictatorships or ex-communist governments
•
involved in wars, revolutions, and coups
•
export lots of raw materials
•
located near equator
•
rapid population growth
Lecture 18: Money
What is Money?
•
medium of exchange
•
store of value
•
unit of account
Why Money?
Money was created to reduce the costs of exchange.
Specialization in the production process increases output. But, while each individual may
specialize as a producer, she still wants to consume a variety of goods and services. Some
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- Winter '09
- HermBaine
- Microeconomics, Medium of exchange, rich nations, generally accepted commodities
-
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