Grade 11 Textbook definitions:
LEDC- less economically developed countries: formerly known as developing countries and
are the poorest countries, also known as Third World and they have not enjoyed the
benefits of industrialisation
MEDC- More economically developed Countries: the richest countries in the world.
Formerly known as developed countries, First World or rich north. Countries have shown
industrial growth through industrialisation
Multinational companies: companies that operate both across national boundaries and
internationally (Ford)
GNP (gross national product): a measure of the value of all goods and services produced
from all economic activities within a country for a particular year. Reflects the income
earned from goods and services sold to other countries, less any income earned by
foreigners from domestic production
GDP (gross domestic product): represents the income earned from goods and services
produced within a country for a particular year
North-south divide: Brandt division, an imaginary line that separates the richer and poorer
countries based on wealth, doesn’t follow the equator and is geographically incorrect
Newly Industrialised countries (NICS): Developing countries which have reached a more
advanced stage of economic growth [Brazil, China, India, Mexico, Southeast Asian Tigers]
Per capita: per person
GNP per capita: divide GNP by the amount of people in the country, can be used to
determine wealth
Sustainable development: implies the use of natural resources at a controlled rate to ensure
that resources are not depleted an environment should not be damaged by any
development that takes place
Development: an improvement in the country's economic and social conditions by good
management of the natural human resources to create wealth and raise the quality of life of
the people living there
Social development: changes in access to basic services and the quality of life as the
country becomes more developed
Informal sector: the unregistered and unregulated sector of the economy. Activities include
Hawking and Street vending
Human Development Index (HDI): index combines indicators that show longevity (life
expectancy), knowledge (adult literacy and education) and standard of living
Gini co-efficient: this is an economic index which is used to measure inequality or the gap
between the rich and the poor in a country
,Basic needs: shelter, food and water, education, basic services of electricity, sanitation and
health care and each individual has the right to the access to these
SADC: is the largest most integrated of the African trade blocks, in terms of mutual benefits
and regional cooperation of the members and has been in existence since 1980
Biomass fuel: organic matter such as fuelwood, dying and crop residue that is burnt and
converted to energy
Carrying Capacity: the maximum population that resources in a given environment can
support
Peri-urban: in the rural urban fringe, or on the outskirts of an urban area
Multiplier effect: when economic activity creates employment and a market which attracts
further development
Hierarchy: the arrangement of features such as settlements in the order of importance
Centralization: a natural phenomenon where concentrations of people and activities occur
Sphere of Influence: the area served by central place
SDI: a special development initiative is part of an economic strategy by the government to
unlock economic potential, encourage new investors and create jobs in selected corridors
IDZ: an industrial development zone which links nodes in a special development, to
promote economic growth and job opportunities (Coega Development)
Tariffs: taxes that are imposed on imported goods
Commodities: goods or products which are produced to meet needs or wants. They are
used for exchanging markets
Trade Barrier: a tariff, quota or sanction which is imposed on a product or a country to
regulate trade
Emerging Markets: countries or geographic regions, which may be developing countries,
that are increasingly open to exports. These countries are experiencing rapid economic
growth
BRICS: a trade block which consists of the emerging markets of Brazil, Russia, India, China
and South Africa
Outsourcing: this happens when one aspect in the production of a product is done under
contract by an outside company
Balance of trade: refers to the payment obligations that arise when a country exports or
imports goods
Debt: to incur large financial losses which cannot always be paid back
, Imports: goods that are transported into a country from another part of the world
Exports: goods that are transported out of the country to another part of the world
Trade deficit: the difference between the earning from exports and the cost from imports
Trade surplus: the difference between the earning from imports and the cost from exports
Visible trade: the goods that are imported and exported, forming the balance of trade
example of such goods or gold, coal, motor cars, aircraft and petroleum
Value-added product (VAT): a primary resource or commodity which has been further
processed into a product that can be sold
Balance of Payments: the total income and expenditure on foreign trade of the country. The
balance of payments includes the invisible trade as well as the balance of trade
Dumping: when goods are exported at a price less than their normal value. This means
they are exported for less than the price of which they were sold in the domestic market or
LEDC markets, or at less than the production costs
Globalization: process by which people ideas and economic activities in various parts of the
world are interconnected
Slobalisation: the slowdown in global trade therefore globalization has slowed down from
lightspeed to snail’s pace and will feed discontent, this was quite common with COVID-19
and the effects that it had. South Africans will have to support south African made
businesses
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Structure of the economy definitions:
Primary: consists of activities that involve the extraction and the exploitation of raw
materials from the natural environment. Examples: farming fishing forestry and mining
Secondary: the processing of raw materials into products required by the consumer.
Example: food processing, vehicle manufacturing, oil refining, engineering industries,
construction industry and textile production
Tertiary: sector is referred to as the service sector or the service industry and it involves
activities that provide services through distribution of commodities to businesses and
consumers. Example: transport, banking, tourism and health services, retail, wholesale
education, legal services and entertainment industry
Quaternary: economic activities that provide a higher level of services through information
and expert knowledge. Example: research and development education, information and
communication technologies, financial planning and some government activities
