Summary AQA A-level Economics: Measures of Economic Development
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Course
The national and international economy
Institution
AQA
Key Summary Notes for the AQA A-level Economics course on Measures of Economic Development, part of the Economic Development topic, guaranteed to boost you to the top grades.
Single Indicators: Indicators looking at 1 thing in isolation
1) GDP/ Capita - Total GDP/Population
Pros:
Can give blank measure of incomes
Cons:
Doesen measure income inequalities
GNI per Capita (ALTERNATIVE TO GDP/Capita)
GNI looks at income generated by all FOP regardless of where they are
operations
In Developing countries - lots of FOP may not stay in the country.
E.g Labour leaves the country - to higher developed economies.
Developing countries attract FDI - due to cheap labour
Profits made by FDI - leaves a developed economy - isn't counted in GDP
but GNI does.
PPP - Purchasing Power Parity (Alternative to GDp and GNI)
- GDP and GNi doesn't tell us how far money can go
- GDP/GNI is converted into USD
- Allows for comparisons for GDP per capita of different countries
- But doesnt tell us what that purchasing power is
E.g Uk GDP/capita = $43000 India = $1100
BUT - GDP/capita doesn't tell us how far $1100 can go in India
$1100 may be able to buy lots of things in India.
India’s per capita income may be able to go further than the UK's due to
lower costs of living.
This is PPP.
2) Heath Measures - Life expectancy/Infant Mortality
Pros:
These measures can measure development.
, Life expectancy increasing = Health institutions improving = patients
treated = better medication/vaccinations.
This implies - better education for doctors to improve life expectancy -
sanitation has improved in the country - access to hospitals have
increased.
Cons:
Single Indicator - Does Not fully measure development
3) Education Measures - Adult Literacy/Enrollment in Primary
Education
Pros:
Better adult literacy = better educational institutions = development
Better teachers = higher teacher incomes = development.
Cons:
Single Indicator - Does not fully measure development
*HDI - Human Development Index
HDI = Includes 3 key things - Weighted EQUALLY
1) Longevity - Life Expectancy at Birth
Health Indicator
2) Knowledge - Adult Literacy Rate /School Enrollment
Education Indicator
3) Standard of Living - GDP/capita - PPP
Index:
Closer to 1 = More Developed
0-0.49 = Low Development
0.50-0.69 = Medium Development
0.7-0.79 = High Development
>0.8 = Very High Development
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