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Summary Developed and developing economies
Cambridge IGCSE economics summary of chapter 7 developed and developing economies done in colour with definitions to make it clear
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Economics (0455)Unit 7.1 Developed and less-developed
economies
Economic development in different economies
Þ Involves an increase in the economic welfare or well-being
of people through growth in the economy
Þ Government policies aim for continuous and sustained
economic growth
Þ So, their economies expand from developing to developed
Developed economies
Þ Is generally thought to be efficient, having a wide range of
industries with firms of different sizes producing and
selling a wide variety of goods and consumers.
Þ Well-developed infrastructure
Þ Also called industrialized nations – more serviced based
rather than manufacturing
Less-developed economies
Þ Has relatively low economic development
Þ Fewer industries and not a wide variety of goods and
services being produced
Þ Infrastructure is underdeveloped and many are poor
Þ Rapidly developing economies or newly industrialized
economies are undergoing significant growth
Reasons for low economic development:
• Too much dependence on agriculture to provide jobs –
more people in developing countries work in agriculture
rather than manufacturing.
• Domination of international trade – developed countries
buy the natural resources from the developing country,
, export to make it into a finished good then sell it back to
the developing country at a higher price
• Lack of capital – income and funds are so low that there
isn’t enough to reinvest into businesses or the country and
nobody overseas is willing to invest with no profit in sight
• Insufficient investment in education and health care
• Low levels of investment in infrastructure
• Lack of an efficient production and distribution system for
goods and services – many lack industries and services –
not enough money to startup businesses to solve this
issue
• High population growth – supply of goods and services
must be shared more
Development indicators
UN Millennium development goals
• in 2000 a total of 189 nations belonging to the UN, set a
millennium development goals – had eight anti-poverty
goals
United nations goals:
• eradicate extreme poverty and hunger
• Universal primary education
• Reduce child mortality
• Combat HIV/AIDS and other diseases
• Environmental stability
• Gender quality
• Global partnership for development
Measures of poverty
• They combine both absolute and relative measures –
there is no single way to measure economic development
or poverty:
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