APHUG Unit 7 Notes | Knowt (2024)

Vocab:

Chapter 18

Chapters 19-20

7.1: Industrial revolution & its impacts:

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• Sewers, factories, cemeteries

• Rise in colonialism & imperialism

• Increase in pollution

• Better public health

• Allowed farmers to work in larger areas of land with high tech machinery

• Increase in population

Cottage Industry: small home based businesses that make goods

Deindustrialize: decrease in manufacturing jobs (usually found in developed countries).

Rust Belt: region w/lots of closed factories

7.2: Economic Sectors & Patterns

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Primary: extract resources

Secondary: process materials into usable goods

Tertiary and above: provide services

Multiplier effect: the potential of a job to produce additional jobs

Ex: auto manufacturer expands a plant and adds 100 new jobs in a community -> new workers have more money -> spend money on food & clothes -> expansion of other businesses

Least cost theory: Theory created by Alfred Weber that says industry is located in a place where transportation costs & labor costs are minimal. And a place that maximizes agglomeration economies.

*Weber’s locational triangle explains the following

Bulk-reducing industry: weight is lost during processing (Ex: copper)

Companies can usually save money by locating production closer to the source of the raw material due to the fact that it would be more expensive to transport the extracted material rather than the finished product.

Bulk gaining industry: weight is gained during processing

Companies usually save money by locating production closer to the factory.

Break of bulk: transferring cargo from one mode of transport to another

Containerization: goods are loaded into a standardized shipping unit

Intermodal: can be carried on a truck, train, ship, or plane

Footloose: businesses not tied to a specific location

7.3: Measures of Development

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Gross National Income/Gross National Product (Though these aren’t entirely the same, they’re used interchangeably in the book, so I'm assuming that’s how it’s gonna be in the exam): Money generated by citizens including citizens that live abroad.

Gross Domestic Product (GDP): The amount of money earned by people within the country

It's very important to know the difference between GDP & GNI, GDP is money generated by EVERYONE on the country’s soil, even if they aren’t a citizen. On the other hand, GNI is money generated by citizens on soil AND abroad. Someone that isn’t a citizen but works in the country does not count into a country’s GNI.

Statistics & how it ties to this topic:

• The total size of a country’s economy influences the total size of its outputs (Ex: India & the UK in 2019: their GDPs were extremely close but their per capita was drastically different, the UK’s was higher. This is due to population).

• Purchasing power parity (PPP): measure of what similar goods cost in different countries

Formal sector: Portion of the economy monitored by the gov.

Informal sector: Portion of the economy not monitored by the gov. (Ex: street food)

Informal sectors can play a huge role on how much a country earns. For example, India mostly consists of informal sectors. Meaning that taxes are not being collected.

Question: If 86% of the economy is informal, what does that tell you about the country on the stages of economic growth model?

Gini Coefficient: measures the inequality of income

• Higher the number, higher the inequality

• The closer the gini coefficient to 0, it indicated less inequality. A perfect 0 indicates that everyone earns the same amount

• The closer the gini coefficient is to 1, indicates more inequality. If it's perfectly 1, it means that 1 person is earning everything and the rest none.

• Generally, periphery & semi-periphery countries have gini-coefficients closer to 1 while core countries have gini-coefficients closer to 0

Patterns of Economic Development

• Africa & South America: Africa has countries w/growing economies but ppl don’t earn incomes anywhere near what ppl in developed countries earn. South Africa has countries w/low and middle income countries.

• Asia: THE ASIAN TIGERS (Japan, South Korea, Hong Kong, & Singapore) literally drive the economy in Asia. They’re smart and invest their $$$ on edu. China & India have shown fairly good economic development and are on the path to success.

• North America: Account for over 50% of the world’s GDP. Should be self explanatory on their economies (They’re really good)

Gender & it’s Role in Development

• Gender Gap: Difference in privileges given to men & women based off of gender

• Gender Inequality Index (GII): A measure of of potential human development lost due to gender disparity

Factors that are used to calculate GII:

• Maternal mortality rate: amount of women that die giving birth

• Adolescent birth rate: amount of birth for women 15-19

• Seats in Parliament: Amount seats in parliament held by women & males (in proportion)

• Secondary Education: percent of women that got secondary education (high school)

• Labor Force participation: labor force participation rate of women & men over 15

Question: what does the GII of Switzerland tell you about the country?

Human Development Index (HDI):

• A measure of “human well-being”

• Combines GNI per capita & 3 social measures (life expectancy, expected years of schooling, & average years of schooling)

• Closer the number is to 1, the higher the HDI, meaning that human well-being is better

7.4: Women & Economic Development

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Barriers to Gender Inequality

• Cultural barriers

• Lack of educational opportunities -> reduce employment options

• Limited access to loans & other resources -> harder to open and run businesses

In developing countries, women generally do not work jobs relating in civil service or the government

Increased Opportunities for Women

• Transnational Corporations: usually employ females in developing countries because they are cheaper

• Low birth rates: Countries like Japan & Singapore would be done if women weren’t in the workforce.

• Increased educational opportunities

• Non-governmental organizations: Things like microcredit/microloan encourage and assist women to open and run business by giving them small loans for low interest.

7.5: Theories of Development

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Rostow’s Stages of Economic Growth

• Walt W. Rostow

• Model that focuses on the shift from traditional to modern forms of society

• Assumes that all countries want to modernize and do so but at different speeds

• Developed based off of the U.S & Europe

Five Stages

1. Traditional Society: not started development; high % of agriculture (primary sector activities like fishing, farming, hunting, etc.)

2. Preconditions for Take-Off: new businesses, gov. Invests in tech and infrastructure -> MORE PRODUCTIVITY

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3. Take-Off: rapid growth from limited economic activities; primary sector begins to shrink & country begins to urbanize

4. Drive to Maturity: diffusion of modern tech, more growth, and more skilled workers; more investments in social infrastructures (schools, hospitals, etc.)

5. High Mass consumption: shift from heavy industry to consumer goods; strong tertiary sector

Criticisms

1. Limited examples: based on America & Europe & therefore doesn’t fit countries that are of non-western culture

2. Role of Exploitation: LDCs developed DEPENDENCY on MDCs

3. Bias towards progress: regressions might occur (as in, the model suggests that you always keep moving forward but what some countries may regress in development) (Ex: South Africa)

4. Lack of variation: Not all countries have the potential to develop. There are variations in size, location, and pop., natural resources and many factors that may contribute to this. (Ex: Niger due to the fact that it’s landlocked, we may never see the country prosper)

5. Lack of sustainability: assumes that everyone would lead a life of high mass consumption but doesn't take into account sustainable development nor carrying capacity

6. Need for poorer countries: MDCs rely on LDCs and used them to get to where they are now

7. Narrow focus: does not address interactions between countries (globalization)

World Systems Theory

• Immanuel Wallerstein

• Dependency model: countries don’t exist in isolation but are part of an intertwined world system

• Political & economic

3 Types

1. Core

2. Semi-Periphery

3. Periphery

Criticisms

1. Little Emphasis on Culture: didn’t pay attention to how culture could become of influence

2. Emphasis on Industry: Focused on industry but many countries have postindustrial economies based on providing services

3. Lack of Explanation: suggests that countries can change status but doesn't explain how

4. Limited Roles: fails to recognize organizations like the UN and charitable NGOs

Commodity dependence: dependent on the production of one good

Ex: Kenya makes most of its money from coffee, so, its commodity dependent

7.6: Trade & the World Economy

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Trade: when one party wants something that it doesn’t have or cannot produce and another party has that desired good and is willing to part with it.

Barter: trade w/o money

Comparative Advantage: the ability to produce a good or service at a lower cost than others

Ex: Chinese workers receive lower wages than U.S workers so they can manufacture goods at a lower cost

Complementarity: When a country has the income, goods, or services that another country desires.

Ex: Canada has maple trees and Costa has coffee. Both countries desire what the other has but are not able to produce it, so they import those products.

When complementarity doesn’t exist, trade is weighted on one side and can cause conflicts. This is what is going on with China and the U.S right now. U.S citizens are reliant and are able to afford the goods imported from China. On the other hand, Chinese citizens are not able to afford the goods imported from the U.S, causing conflicts.

Free Trade: policies that reduce trade barriers

Neoliberal Policies: set of reforms that reduce government regulation and taxation

Trading blocs: a group of countries that agree to a set of trade rules

Ex: Mercosur (aka the Southern Common Market, consists of South American countries)

International Monetary Fund: created to aid countries in need of financial assistance.

Microloan: A small loan lent to starting businesses at low interest

7.7: Changes as a Result of the World Economy

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Outsourcing: Companies use independent suppliers abroad

Ex: Nike designs its shoes and sends it to manufacturing sites that aren’t owned by the company

Offshoring: Moving services or manufacturing to other countries

New International Division of Labor: a new system of employment in the sectors of the economy

• Core countries now have most people working tertiary-quinary sector jobs

• Semi-periphery countries manufacture goods to market in core countries

• Periphery countries export minerals and resources to core and semi-periphery countries

Basic Economic Activity: Actions that generate new money for a region

Ex: manufactured goods & commercial farm products

This generates new money because these goods are sold outside the location where the manufacturing location is located so money from outside the area is used to purchase the products. On the other hand, a non-basic economic activity is something that doesn’t generate new money. A local grocery store would be an example of this. This is because the money is circulating in the community.

Export Processing Zones (EPZ) :A place where goods are produced to be exported

• Maquiladoras: Mexican EPZs

• Special Economic Zones: Chinese EPZs

• Free-Trade Zones: foreign companies can store, warehouse, transfer, or process w/o addition taxes or duties

There’s been lots of conflict regarding whether or not EPZs are ethical. Though EPZs may not be paying as much as they would and may be taking advantage of cheap labor in LDCs, they definitely pay more than what companies owned by citizens of the country would pay. EPZs also employ lots of females due to higher access and lower wages. Meaning that they give more opportunities for women in LDCs.

Postindustrial Economy: an economy that doesn’t employ large numbers of people in factories but has people who provide services and process info (So, in short something like robots doing work and people just operating them).

Fordism: Less skilled workers doing 1 job w/the concept of the assembly line in order to make products more efficiently

Assembly Line: An item is moved from worker to worker w/each person repeating the same task. (Downside: doesn’t leave room for error)

Substitution Principle: When businesses maximize profit by substitution one factor of production for another

Post-Fordist: A system that has workers who can do more than one task work in groups (literally the opposite of fordism)

Just-in-time delivery: inputs in the assembly process arrive when needed

(reduces storage costs)

Locational interdependence: When the location of one factory is dependent on other factories

Businesses can benefit from doing this because locating near similar factories allows them to use the same services.

Technopole: a hub for info based industry and high tech manufacturing (kind of like an agglomeration economy but for tech)

• Usually located near universities

• Usually act as growth poles: an area in a region that drives economic development

• Spin-off benefits: additional outcomes from growth poles (Ex: farmers far away from growth poles have space have expanded markets to sell their goods)

• Backwash effect: downsides of growth poles (loss of highly educated people from a region who have now migrated to growth poles)

Brownfields: abandoned factories

Rust Belt: A region w/lots of closed factories (Northeast & lands around the Great Lakes)

Corporate park: A place with lots of office buildings

7.8: Sustainable Development

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Sustainability: Using the earths’ resources w/o harming the environment

Ecological footprint: the impact a person has on the environment (people in MDCs usually have a higher ecological footprint)

When people overuse resources, development becomes unsustainable. People have been depleting resources such as fossil fuels which are continuously damaging the environment. This has led to the use of alternatives like solar and wind energy. An example of this would be Poland. In Poland, it's more harmful to the environment to drive an electric car. This is due to the overuse of coal.

Pollution also plays a huge role in the environment and climate change in general. LDCs have seen lots of deaths, mostly in children due to pollution.

Rises in temperature can have lots of effects including:

• Diseases from the equator spreading to other areas

• Rising water levels due to glaciers melting

• Increase in refugee crises due to rising water levels which could lead to floods

Ecotourism: travel to a region by people who are interested in its unique ecosystem

The money generated by ecotourism is extremely beneficial in assisting to transform these places to an industry or agriculture. Ecotourism can also have its risks at times if too many people visit a fragile ecosystem which could potentially harm and permanently damage the ecosystem.

Sustainable Development Goals: A set of 17 goals developed by the UN to end poverty & protect the planet.