C66 Midterm Prep.docx

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University of Toronto Scarborough
Economics for Management Studies
Garth Frazer

Development - The process of improving the quality of all human lives - Objectives  To increase the availability and widen the distribution of basic life-sustaining goods such as food, shelter, health, and protection  To raise levels of living, including in addition to higher incomes, the provision or more jobs, better education, and greater attention to cultural and human values, all of which will serve not only to enhance material well-being but also to generate greater individual and national self-esteem  To expand the range of economic and social choices available to individuals and nations by freeing them from servitude and dependence not only in relation to other people and nation-states but also to the forces of ignorance and human misery - Core Values  Sustenance: theAbility to meet basic needs  Self-Esteem: to be a person; to be a functioning member of the society in a certain community  Freedom from servitude: to be able to choose; the concept of human freedom Social System - The organizational and institutional structure of a society, including its values, attitudes, power structure, and traditions. Major social systems include political processes, religions, and ethnic divisions Gross National Income (GNI) - The total domestic and foreign output claimed by residents of a country (GDP + factor incomes accruing to residents from abroad - the income earned in the domestic economy accruing to persons abroad) Gross Domestic Product (GDP) - The total final output of g/s produced by the country‟s economy, w/in the country‟s territory, by residents and non-residents, regardless of its allocation b/n domestic and foreign claims Sen’s CapitabilitiesApproach - Capabilities: the freedom that a person has in terms of the choice of functioning, given his personal features and his command over commodities; what people do or can do with the commodities of given characteristics that they come to possess or control - The view that income and wealth are not ends in themselves but instruments for other purposes goes back at least as far - Economic growth cannot be sensibly treated as an end in itself; it has to be more concerned w/ enhancing the lives we lead and the freedoms we enjoy - Poverty cannot be properly measured by income or even by utility, what matters is the person “being” or is able to do, what it cannot do, and what it is (ex. The value of the book to an illiterate person) Millennium Development Goals (MDGs) - Target-based, time-limited commitments in the UN Millennium Declaration 2000 to improve eight areas: poverty and hunger, primary education, gender equality, child mortality, maternal health, tackling diseases such as HIV/AIDS and malaria, environmental sustainability, and partnership working Characteristics of Developing Countries - Lower levels of living and productivity - Lower levels of human capital - Higher levels of inequality and absolute poverty  Absolute poverty: a situation where a population or section of a population is, at most, able to meet only its bare subsistenc(최저생활) essentials of food, clothing, and shelter to maintain minimum levels of living  Subsistence economy: - Higher population growth rates - Greater social fractionalization  Fractionalization: significant ethnic, linguistic, and other forms of social divisions w/in a country - Larger rural populations but rapid rural-to-urban migration - Lower levels of industrialization and manufactured exports - Adverse (불리한) geography  Resource endowment: a nation‟s supply of factors of production. Normally such endowments are supplied by nature (ex. Labour, raw materials) - Underdeveloped financial and other markets  Imperfect markets  Incomplete information: - Lingering(오래 끄는) colonial impacts such as poor institutions and varying degrees of external dependence (economic, political, cultural, and environmental) Classic Theories of Economic Development - The linear-stages-of-growth model  Transition from underdevelopment to development can be described in terms of series of steps or stages through which all countries must proceed  The mobilization of domestic and foreign saving in order to generate sufficient investment for accelerating economic growth
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