4.1.1 Growing Economies

Definitions to Know

• GDP – Gross domestic product is a monetary measure of the market value of all final goods and services produced in a period of time.
• GDP Per Capita – GDP divided by the population of an economy.
• Purchasing Power Parity (PPP) – An economic theory that compares different countries through a basket of goods approach.
• Industrialisation – The process of reorganising an economy from one of agriculture to one of manufacturing
• Human Development Index (HDI) – An average of GDP per capita, life expectancy at birth and education attainment.
• Primary sector – Extraction of raw materials.
• Secondary sector – Manufacturing.
• Tertiary sector – Services.

Different Types of Economies

🔗 A developed economy has established sectors of industry and has a sustainable level of growth. An economy that has reached its potential. 📝E.g. USA, UK and Germany

🔗 An emerging economy experiences rapid levels of growth and industrialisation. It's primary, secondary and tertiary sectors are changing alongside a growing middle class. 📝E.g. India, Brazil and Nigeria

🔗 An underdeveloped economy experiences low growth in all areas (GDP, productivity and wages) whilst also having what is considered low GDP. 📝Examples include – Sudan, Haiti and Rwanda

Growth

🔗 Economic Growth – An increase in the productive capacity of an economy to produce goods and services.

• Profits reinvested into capital or research.
• High consumer and business confidence.
• High disposable incomes
• Strong position to negotiate.
• Environmental impact.
• Income gap/inequality.
• Poor working conditions for workers.
• Inflationary growth is short-term.