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    Economic Development 5.1

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    Zoe Tetsuya
    The document discusses measures of living standards such as GDP per capita and the Human Development Index, which considers factors like income, education, and health. It also examines poverty, defining absolute and relative poverty, and factors that can contribute to poverty like unemployment, low education, family size, age, and poor health or government services. Methods to reduce poverty through policies aimed at employment, taxation, welfare, and minimum wages are also outlined. The document also briefly touches on defining and measuring population as well as factors influencing birth rates.

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    Economic Development 5.1

    Uploaded by

    Zoe Tetsuya
    9 views4 pages
    The document discusses measures of living standards such as GDP per capita and the Human Development Index, which considers factors like income, education, and health. It also examines poverty, defining absolute and relative poverty, and factors that can contribute to poverty like unemployment, low education, family size, age, and poor health or government services. Methods to reduce poverty through policies aimed at employment, taxation, welfare, and minimum wages are also outlined. The document also briefly touches on defining and measuring population as well as factors influencing birth rates.

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    The document discusses measures of living standards such as GDP per capita and the Human Development Index, which considers factors like income, education, and health. It also examines poverty, defining absolute and relative poverty, and factors that can contribute to poverty like unemployment, low education, family size, age, and poor health or government services. Methods to reduce poverty through policies aimed at employment, taxation, welfare, and minimum wages are also outlined. The document also briefly touches on defining and measuring population as well as factors influencing birth rates.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    9 views4 pages

    Economic Development 5.1

    Uploaded by

    Zoe Tetsuya
    The document discusses measures of living standards such as GDP per capita and the Human Development Index, which considers factors like income, education, and health. It also examines poverty, defining absolute and relative poverty, and factors that can contribute to poverty like unemployment, low education, family size, age, and poor health or government services. Methods to reduce poverty through policies aimed at employment, taxation, welfare, and minimum wages are also outlined. The document also briefly touches on defining and measuring population as well as factors influencing birth rates.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 4

    2/24/22, 9:54 AM Print Preview

    Economic Development 5.1-5.3

    LIVING STANDARDS

    DEFINITION
    keyword

    Living standards
    part of speech

    meaning

    refer to all the factors that contribute to a person’s well-being and happiness

    Measuring Living Standards

    GDP per head/capita - this measures the average income per person in an economy.
    Real GDP per capita = Real GDP / Population

    - indicates the material well-being of the economy


    - takes population into consideration, adding emphasis on the goods and services
    available to individuals
    - a good indicator of the jobs being created

    - it takes no account of what people can buy using their incomes.


    - GDP doesn’t consider changes in technology that can have a large impact on living
    standards.
    - Distribution of income is very unequal in reality

    Human Development Index (HDI): used by the United Nations to compare living
    standards across the globe, the HDI combines different measures into one to give a
    HDI value from 0 (lowest) to 1(highest).
    - Income index, measured using the average national income – GNI per head
    - Education index, measured by how many years on average
    - Healthcare index: measured by average life expectancy at birth

    - takes into account some major indicators of living standards


    - it is a useful method to compare global living standards– it shows clear patterns of

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    living standards
    - very useful and reliable measure since its produced by the UN

    - there are wide divergences in HDI within countries


    - GNI per head doesn’t say anything about inequalities in income and wealth within
    countries
    - the HDI information for all countries may not be available

    GPI (Genuine Progress Indicator) - GPI is other composite measure containing


    numbers of indicators. It starts with GDP then adjusts for income distribution

    POVERTY

    DEFINITION
    keyword

    Absolute poverty
    part of speech

    meaning

    the inability to afford basic necessities needed to live (food, water, education,
    health care and shelter). This is measured by the number of people living below a
    certain income threshold (called a poverty line).

    DEFINITION
    keyword

    Relative poverty
    part of speech

    meaning

    Relative poverty is basically a measurement of income inequality since a high


    relative poverty should indicate a higher income inequality.

    - Unemployment: when people are unemployed and have to go without income for a
    long time, they may end up having to sell their possessions, consume less and go and
    into poverty.

    - Low education levels: this means that people are uneducated, unskilled and unable
    to find better jobs, keeping them in poverty.

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    - The size of family: more family members with only a few people earning, means
    more costs of living, pulling the family into poverty if they’re not earning much.

    - Age: older people are likely to have more health problems and be less suitable for
    further employment, causing poverty. Young people are still employable and may find
    ways to earn an income.

    - Poor government support for basic services.

    - Poor health: ill mental and physical health is both a cause and result of poverty.

    - Introduce measures to reduce unemployment: an expansionary fiscal/monetary


    policy will increase aggregate demand and increase employment opportunities.
    Income and standards of living will rise.

    - Impose progressive taxes: income taxes are progressive, that is, they increase as
    income increases. Imposing these will mean that people on higher incomes will pay a
    large percentage of their incomes as tax and help reduce relative poverty.

    - Introduce welfare services: money from taxes can be provided as income support to
    people with very low incomes. It can also be used to provide free or low-cost homes,
    healthcare and education.

    - Introduce minimum wage legislation to raise the wage of low-paid employees.

    POPULATION

    DEFINITION
    keyword

    Population
    part of speech

    meaning

    total number of people inhabiting a specific area.

    - Birth rates: the average number of children born in a country each year compared
    to the total population of an economy is known as the birth rate

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    - Living standards: improved quality and availability of food, housing, clean water and
    medical care result in fewer babies dying. Countries where children often die due to
    poor living standards have higher birth rates

    - Contraception: increased use of contraception and legalisation of abortion have


    reduced birth rates in developed countries.

    - Marriage: in developed countries, people are tending to marry later in life, so birth
    rates have reduced.

    Updated 4 months ago

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