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Introduction to Development Economics
Development Economics is the study of how economic policies and practices can be used to improve the living standards of people in developing countries. It focuses on topics such as poverty, inequality, education, health, and economic growth.
Basic Concepts
- What is the difference between developed and developing countries?
Developed countries are countries that have achieved a high level of industrialization and economic development. They have higher levels of income, better access to technology, and higher standards of living than developing countries. Developing countries, on the other hand, are countries that are in the process of developing their economies. They have lower levels of income, less access to technology, and lower standards of living than developed countries.
- What is economic growth?
Economic growth is an increase in the production of goods and services in an economy over a period of time. It is measured by the percentage increase in the real gross domestic product (GDP) of a country over a period of time.
- What is poverty?
Poverty is a state of deprivation in which people lack the resources to meet their basic needs. It is measured by the percentage of people in a country who live on less than a certain amount of money per day.
- What is inequality?
Inequality is the unequal distribution of resources and opportunities across different groups of people. It is measured by the gap between the rich and the poor in a society.
Practice Problems
- A developing country has a GDP of $100 billion and a population of 10 million. What is its GDP per capita?
GDP per capita is calculated by dividing the GDP of a country by its population. In this case, the GDP per capita is $10,000.
- A developing country has a poverty rate of 20%. What percentage of the population is living in poverty?
20% of the population is living in poverty. This means that 2 out of every 10 people in the country are living in poverty.
- A developed country has a Gini coefficient of 0.4. What does this indicate about the level of inequality in the country?
A Gini coefficient of 0.4 indicates that there is a high level of inequality in the country. A Gini coefficient of 0 indicates perfect equality, while a Gini coefficient of 1 indicates perfect inequality.
