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GMS 724 Study Guide - Midterm Guide: Gross National Income, High Standard Manufacturing Company, Gross National Product

Global Management Studies
Course Code
GMS 724
Study Guide

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Chapter 3 - Measuring Economic Development, Performance , and
Potential & Gross National Income
Measuring Economic Development, Performance, and Potential
Managers use various measures to assess a country's economic development,
performance, and potential
o They also monitor indicators of the direction and dynamic of transition
from one type of economic system to another
o Some measure may be informal or idiosyncratic: i.e., number of wireless
subscriptions, amount of electrical power generated, internet searches for
telltale terms, or military officers running companies
o Typically, convention dominates practice
o Matters of income and wealth often anchor analysis
o Managers elaborate their analyses with indicators of sustainability and
Before reviewing each, a brief note regarding how we classify each countries is
in order
o We follow the World Bank's lead in labeling low-and middle-income
nations as developing countries
o This type has low per capita income---an average of $2,963 in 2009
o The vast majority of their citizens have a low standard of living with limited
access to few goods and services
o Developing countries comprise the largest number of countries (151 or so,
according to the World Bank) and have the highest number of inhabitants (
a combined 3.5 billion) in the world
The faster growing, relatively prosperous developing countries such as China,
Brazil and India are referred to as emerging markets or emerging economies
o Currently, there are approximately 30 or so emerging countries in the
o Notwithstanding the variability, the core group consistently includes Brazil,
Russia, India, and China
o Typically, when one speaks of the emerging economies, one speaks
primarily of BRICs
o Although much larger in scale and scope than other emerging economies,
the BRICs are the vanguard of change
o Many presume that where the BRICs go, both good and bad, others will
In contrast, developed countries are those with high per capita income---an
average of $37,970 in 2009
o Their citizens have a high standard of living with access to a variety of
goods and services
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