2.2 Measuring economic development

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• Middelbare school
• vmbo t
• Leerjaar 1

2.2 Measuring economic development

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Drag the countries to the right spot!

Less Economically Developed Country

More Economically Developed Country

Germany

Australia

Vietnam

Ethiopia

Canada

India

Drag the observations to the right picture!

First world country

Third world country

South

North

LEDC

MEDC

What type of observation did we just do?

1. Subjective
2. Objective

The Netherlands is a LEDC

1. True
2. False

People in the city earn more money than people in the countryside. Which keyword belongs to this sentence

1. Slums
2. Regional Disparities
3. Economic Migration
4. MEDC

After studying this section, you will be able to:

Explain what kind of different economic development indicators you could use to compare the wealth of different countries

Explain what the advantages and disadvantages are of using these economic indicators

How to measure economic development?

What example could you think of?

Gross Domestic product

the total value of all products and services produced by a country.

Is this a good way to check if the people in a country are rich?

GDP per capita

the total GDP of a country divided by the number of citizens in that country.

Disadvantages of GDP

1. The GDP per capita is an average number
2. The GDP per capita cannot tell us anything about differences in a certain area in a country.
3. The GDP per capita doesn’t tell you anything about what you can buy
4. In some countries it is very difficult to measure the GDP

Purchasing power:

Shows how the value of money isn't the same everywhere.

How much can you buy for $1,-?

There are three sectors people can work in

Primary sector

Primary sector

the employment sector in which people earn their money by working in agriculture, mining, forestry or fishing.

In general, the percentage of people working in the primary sector is much higher in LEDCs than in MEDCs.

Secundary sector

Secondary sector

the employment sector in which people earn their money by working in a factory.

The amount of people working in the secondary sector has increased in LEDCs and decreased in MEDCs.

Tertiary sector

Tertiary sector

the employment sector in which people earn their money by providing services.

Wages in the tertiary sector can be quite high. Most people in the MEDCs work in this sector.

Formal or informal sector

Formal sector: registered work --> falling into one of the 3 sectors we just went through.

Informal sector --> work outside the registered GDP 

(Meaning Illegal work!)

Is this an example of somebody working in the formal or informal sector?

1. Formal
2. Informal

In which sector does this person work?

1. Primary Sector
2. Secondary sector
3. Tertiary sector
4. Informal sector

And this one?

1. Primary sector
2. Secondary sector
3. Tertiary sector
4. Informal sector

And this one?

1. Primary sector
2. Secondary sector
3. Tertiary sector
4. Informal sector