Chapter 22: Growing Economies

1. Developing and Developed Countries

Developed Countries

• High income level
  • High GDP per capita.
• High literacy rate
  • Majority of the population can read and write.
• High life expectancy
• Good infrastructure
  • Access to schools, colleges, healthcare, railways, etc.
• Highly industrialized
  • Relies heavily on the tertiary sector rather than the primary sector.
• Low population growth

Developing Countries

• Low income level
  • Lower income per capita.
• Low literacy rate
  • Limited resources for education; small portion of the population can read and write effectively.
• Low life expectancy
• Poor infrastructure
  • Lack of roads, railways, schools, hospitals, and production facilities.
• Reliance on the primary sector
  • Large proportion of citizens rely on agriculture, mining.
• High population growth

2. Emerging Economies

• Defined by rapid growth, usually measured by GDP.
• Examples: BRICS (Brazil, Russia, India, China, South Africa)

3. Implications of Economic Growth for Individuals and Business

3.1 Trade Opportunities

• Economic growth leads to increased consumption and higher disposable incomes.
• Attractive for firms looking to invest or sell products and services.

3.2 Employment Patterns

• Businesses may want to assess employment patterns across economies.

4. Indicators of Growth

4.1 Gross Domestic Product (GDP) per Capita

• Defined as all goods and services produced in a year divided by the population.

Benefits

• Indicates average revenue per capita.
• Simple and widely used.
• Facilitates comparison among countries.

Drawbacks

• Does not indicate the standard of living; higher GDP may coincide with higher cost of living.
• Excludes negative externalities.
• Excludes non-monetary jobs (e.g., charities).

4.2 Human Development Index

• Life Expectancy: Measures average lifespan, indicating healthcare system quality.
• Mean Years of Schooling: Average education level of a 25-year-old.
• Gross National Income (GNI) per Capita: Illustrates population's relative wealth (measured as PPP).