IDENTIFICATION: Determine what is being asked or described. 1. An attempt to identify characteristic features of the internal process of structural transformation that a “typical” developing economy undergoes as it generates and sustains modern economic growth and development. 2. The reliance of developing countries on developed-country economic policies to stimulate their own economic growth. 3. A situation in which the developed countries have much greater power than the less developed countries in decisions affecting important international economic issues, such as the prices of agricultural commodities and raw materials in world markets.
IDENTIFICATION: Determine what is being asked or described.
1. An attempt to identify characteristic features of the internal process of structural
transformation that a “typical” developing economy undergoes as it generates and
sustains modern
2. The reliance of developing countries on developed-country economic policies to
stimulate their own economic growth.
3. A situation in which the developed countries have much greater power than the less
developed countries in decisions affecting important
as the prices of agricultural commodities and raw materials in world markets.
4. An economic situation characterized by persistent low levels of living in conjunction with
absolute poverty, low income per capita, low rates of economic growth, low
consumption levels, poor health services, high death rates, high birth rates, dependence
on foreign economies, and limited freedom to choose among activities that satisfy
human wants.
5. The proposition that developing countries have failed to develop because their
development strategies (usually given to them by Western economists) have been based
on an incorrect model of development, one that, for example, overstresses capital
accumulation or market liberalization without giving due consideration to needed social
and institutional change.
6. The coexistence of two situations or phenomena (one desirable and the other not) that
are mutually exclusive to different groups of society—for example, extreme poverty and
affluence, modern and traditional economic sectors, growth and stagnation, and higher
education among a few amid large-scale illiteracy
7. A closed economy that attempts to be completely self-reliant.
8. The theory that self-interest guides all individual behavior and that governments are
inefficient and corrupt because people use government to pursue their own agendas.
9. An action taken by one firm, worker, or organization that increases the incentives for
other agents to take similar actions.
10. A situation in which the inability of agents to coordinate their behavior (choices) leads to
an outcome (equilibrium) that leaves all agents worse off than in an alternative situation
that is also an equilibrium.
11. An economic model in which production functions exhibit strong complementarities
among inputs and which has broader implications for impediments to achieving
economic development.
12. A positive or negative spillover effect on a firm’s production function through some
means other than market exchange.
13. A bad equilibrium for a family, community, or nation, involving a vicious circle in which
poverty and underdevelopment lead to more poverty and underdevelopment, often from
one generation to the next.
14. The spillover of information— such as knowledge of a production process—from one
agent to another, without the intermediation of a market transaction; reflects the public
a good characteristic of information (and susceptibility to free-riding)—it is neither fully
excludable from other uses, nor nonrival (one agent’s use of information does not
prevent others from using it).
15. A decision tree framework for identifying a country’s most binding constraints on
economic growth.
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