Transcript IB Economics: Unit 1

IB
Macroeconomics
EQ: What is macroeconomic
development and how can we
measure it?
Can we define development?
Economic development can be defined as
the development
of economic
wealth
of that
• Do increases
in GDP
per capital
mean
countries
or regions
for the well-being of their
we
have had
development?
inhabitants. It is the process by which a nation
• What
do
mean
when
we
talk
about
improves the economic, political, and social
development?
well being of its people. From a policy
– perspective,
Multidimensional
naturedevelopment
of development
economic
can be
– FREEDOM
defined as efforts that seek to improve the
– economic
Reduction well-being
in poverty and quality of life for a
– community
Education /by
Health
/ Law
and Order
creating
and/or
retaining jobs
supporting
or growing incomes.
– Civiland
liberties
and participation
Human Development Index (HDI)
HIGH HDI countries
• Norway (Rank # 1)
• Sweden (Rank # 6)
• USA (Rank # 10)
• Italy (Rank # 34)
MEDIUM HDI countries
• Macedonia (Rank # 59)
• Saudi Arabia (Rank # 77)
• South Africa (Rank # 120)
LOW HDI countries
• Haiti (Rank # 153)
• Nigeria (Rank # 158)
• Niger (Rank # 177)
Measuring HDI
• Life expectancy at birth
• Adult literacy rates and
availability/enrolment in
school
• GDP per capita (PPP US$)
Ways to improve HDI
• A long an healthy life
• Improved Education
• Increased GDP per capita
(PPP US$)
Purchasing Power Parity (PPP)
Bigdo
Mac
Index is
•The
How
people
inan
informal
way
of measuring
the
Nigeria
survive
on 428
purchasing
USD perpower
year?parity (PPP)
two currencies
and
•between
Purchasing
power of
provides
a test
of theto
extent
currency
needs
be to
which
market exchange rates
considered
goods
costing the
•result
428inUSD
becomes
same
in different
countries. As
1050
USD with
stated
in The Economist,
differences
in cost ofit
"seeks
make exchange-rate
livingtotaken
into account
bit more
•theory
The aBIG
MACdigestible”
index
More measures of development
•
•
•
•
•
Why do we need more?
Gender Related Development Index
Gender Empowerment Index
The Human Poverty Index
Lorenz curve and Gini coefficient
Lorenz Curve
FIG: 1.1
Diagram Title: The LORENZ curve
RECORD NOTES HERE
What does it mean to be poor?
Record Student Ideas Here:
This audio clip from the BBC helps us to understand what it means to be poor in the UK.
http://news.bbc.co.uk/today/hi/today/newsid_7652000/7652228.stm
Gini Coefficent
Source: ECONandBIZ.com
Gini co-efficient
formula
A
A
A+B
B
More indicators of development
•
•
•
•
•
•
•
•
•
•
•
•
Infant mortality rates
Under 5yrs mortality rates
Material mortality rates
Children underweight for age
Water access
Levels of sanitation
Nourishment
Immunisations
Educational enrolment
Literacy
Internet usage
Telephone lines per 1000 people
Activities
1) Complete 2 short response questions
from choice of 3 - page 168 IB text
2) Homework – Complete a detailed essay
plan for Essay Question 1 - page 168 IB
text
Ideas Board