1. Splash Screen

2. Chapter Menu Chapter Introduction Section 1:Section 1:Economic Development Section 2:Section 2:Achieving Economic Development Section 3:Section 3:The Transition to Capitalism Visual Summary

3. Chapter Intro 1 Your pen pal from abroad has asked for your school’s help on a project to improve the quality of life for the students in his school and community. As a member of the planning committee, your task is to suggest ideas. Create a list of ways to help students and the neighborhood as a whole. Present your proposals to the class. Read Chapter 17 to learn about the ways that developing nations can improve the quality of life for their citizens.

4. Chapter Intro 2 1.Every society has an economic system to allocate goods and services. 2.The study of economics helps us deal with global economic issues and global demand on resources.

5. Chapter Intro-End

6. Section 1-Preview Section Preview In this section, you will learn that developing countries face a number of obstacles that make economic growth difficult.

7. Section 1-Key Terms Content Vocabulary developing countrydeveloping country primitive equilibriumprimitive equilibrium takeoff crude birthrate life expectancy zero population growth (ZPG)zero population growth (ZPG) external debt Academic Vocabulary proportion primary default capital flight

8. A.A B.B C.C Section 1 Approximately how many people currently live in poverty throughout the world? A.10 billion B.1 billion C.5 billion

9. Section 1 Economic Development Most of the world’s population lives in developing countries. developing countries Best way to improve the rampant poverty is with economic growth and development.

10. Section 1 The Importance of Economic Development In a global economy, the economic health of all nations is important.

11. Section 1 The Importance of Economic Development (cont.) –Economic problem –Source of social discontent –Source of political unrest Impact of poverty Gross National Income and Gross National Income Per Capita

12. Section 1 The Importance of Economic Development (cont.) Economists convert all currencies to a common unit then express it on a per capita basis. Findings—about 1 billion people live in poverty today. Gross National Income and Gross National Income Per Capita

13. Section 1 The Importance of Economic Development (cont.) International community shares humanitarian and economic concern for the poor: –Moral responsibility to help those with less income and wealth –Self interest—critical raw materials needed from developing countries –Global economic cooperation leads to a more stable political climate.

14. A.A B.B C.C Section 1 Does the export of diamonds from developing countries in Africa have a positive or negative impact on its economy? A.Negative impact on its economy B.Positive impact on its economy C.No impact on its economy

15. Section 1 Stages of Economic Development Thinking about economic growth as occurring in stages helps us understand economic development.

16. Section 1 Developing countries pass through stages of economic development: –Primitive equilibriumPrimitive equilibrium –Transition –TakeoffTakeoff –Semidevelopment –High development Stages of Economic Development (cont.)

17. A.A B.B C.C Section 1 What stage of economic development is a developing country in when its old customs start to crumble? A.Primitive equilibrium B.Transition C.Takeoff

18. Section 1 Obstacles to Development Numerous obstacles make economic growth in developing countries more difficult than in developed countries.

19. Section 1 Challenges facing developing countries –Population growth Obstacles to Development (cont.) High crude birthratecrude birthrate Increase in life expectancylife expectancy Zero population growth (ZPG) –Limited natural resources and geography –Disease and substance abuse

20. Section 1 –Education and technology Obstacles to Development (cont.) Default on loansDefault –Corruption –War and its aftermath –Capital flightCapital flight The Corruption Perception Index –External debtExternal debt

21. A.A B.B C.C D.D Section 1 Which of the following do you think is the biggest obstacle to a developing country’s economic growth? A.Natural resources and geography B.External debt C.Population growth D.Education and technology

22. Section 1-End

23. Section 2-Preview Section Preview In this section, you will learn that developing countries can progress in economic development by finding domestic and international funding and by encouraging regional cooperation.

24. Section 2-Key Terms Content Vocabulary micro loan International Monetary Fund (IMF)International Monetary Fund (IMF) World Bank soft loan expropriation free-trade area customs union Academic Vocabulary ethic duration European Union (EU)European Union (EU) euro ASEAN cartel

25. A.A B.B C.C Section 2 What is the World Bank? A.A religious affiliated organization that makes loans available to foreign entities B.An international corporation that makes loans and provides advice to developing countries C.A group of foreign investors providing economic assistance to the poorest of the poor

26. Section 2 Funding Economic Development Developing countries can fund economic development through savings, international aid and loan programs, and foreign investment.

27. Section 2 Funding Economic Development (cont.) Sources of funding for economic development –Internal savings –Micro loansMicro loans –International Monetary Fund (IMF)International Monetary Fund (IMF) –World Bank GroupWorld Bank Soft loans made to the neediest countriesSoft loans

28. Section 2 Funding Economic Development (cont.) –Borrowing from foreign governments Expropriation The Global Economy & YOU Types of Peace Corps Aid –Private funds from foreign investors

29. A.A B.B C.C D.D Section 2 Which loans are popular with women in small African villages? A.World Bank loans B.Micro loans C.Soft loans D.IMF loans

30. Section 2 Regional Economic Cooperation Regional economic agreements foster trade and economic growth among member nations.

31. Section 2 Ways to promote regional economic cooperation: –Free-trade areaFree-trade area –Customs unionCustoms union –European Union (EU)European Union (EU) Regional Economic Cooperation (cont.) Euro The European Union

32. Section 2 –ASEANASEAN –OPEC Regional Economic Cooperation (cont.) Cartel The European Union

33. A.A B.B C.C D.D Section 2 Which of the following is not true about the European Union? A.The EU acts as a single market. B.No internal barriers regulating flow of workers, capital, goods or services within EU C.Citizens of EU member nations can travel anywhere in EU without trouble. D.A single EU currency is used by all members replacing their national currencies.

34. Section 2-End

35. Section 3-Preview Section Preview In this section, you will learn that reforms in the former Soviet Union, China, and many Latin American and eastern European nations have moved these economies toward more capitalistic, market-oriented systems.

36. Section 3-Key Terms Content Vocabulary capitalism privatization vouchers Five-Year PlanFive-Year Plan Gosplan collectivization perestroika Great Leap ForwardGreat Leap Forward Academic Vocabulary undertaking isolationism Solidarity black market capital-intensive keiretsu population densitypopulation density

37. A.A B.B Section 3 Is capitalism good for developing countries? A.Yes B.No

38. Section 3 The Transition to Capitalism As countries develop their economies, capitalism based on their own cultural and social values spreads across the globe. capitalism

39. Section 3 Problems of Transition Countries in transition to capitalism must learn to abide by the rules of free market economies.

40. Section 3 Problems of Transition (cont.) Capitalism’s benefits –Increased productivity and economic growth –Standard of living for nearly everyone within country increases. Transition from communist and socialist economic systems to capitalism is difficult. –PrivatizationPrivatization Profiles in Economics: Karl Marx

41. Section 3 Problems of Transition (cont.) Vouchers –Loss or shift of political power –Underestimating the costs of capitalism before seeing benefits –Everyone must adjust to new incentives, interpret prices, and fend for him-or herself.

42. A.A B.B C.C D.D Section 3 What are some of the costs a nation may undergo before transitioning to capitalism? A.Social unrest B.Unemployment C.Recession D.Any of the above

43. Section 3 Countries and Regions in Transition Different countries have had varying success in their transitions to capitalism.

44. Section 3 Russian economy –Five-Year Plan—introduced by Joseph Stalin in 1927Five-Year Plan –GosplanGosplan –CollectivizationCollectivization –Perestroika—introduced by Mikhail Gorbachev in 1985Perestroika Countries and Regions in Transition (cont.)

45. Section 3 –After fall of Soviet Union, Boris Yeltsin accelerated privatization. Countries and Regions in Transition (cont.) –Currently, under Vladimir Putin, privatization is slowing.

46. Section 3 China’s economy –Communist economy in 1949 modeled after Soviet Union –Great Leap Forward instituted in 1958Great Leap Forward –Free-market practices in specific regions were copied in 1980s. –Currently, privatizing industries and introducing market reforms Countries and Regions in Transition (cont.)

47. Section 3 Latin American economy –Economic path—combined socialism and isolationism Countries and Regions in Transition (cont.)

48. Section 3 Eastern Europe economy –Many unwilling participants in the Soviet block embraced capitalism. –Struggle began in Poland with Solidarity.Solidarity –Hungary was successful transitioning to capitalism after a thriving black market.black market Countries and Regions in Transition (cont.)

49. A.A B.B C.C D.D Section 3 What impact does Vladimir Putin’s action of slowing down privatization have on Russia’s ability to transition to capitalism? A.Decreases the standard of living for its citizens B.Causes political unrest C.Inhibits profit motive D.All of the above

50. Section 3 Other Faces of Capitalism A number of nations have developed successful free market economies.

51. Section 3 Japan –Loyal and dedicated work force –Ability and willingness to develop new technologies Other Faces of Capitalism (cont.) Capital-intensive –Government is involved in day-to-day activities of private sector Economic Systems and Economic Success

52. Section 3 Stagnation occurred in 1990s—keiretsu prevented true competition.keiretsu Other Faces of Capitalism (cont.) Economic Systems and Economic Success Japan is restructuring today so it can resume its previous growth.

53. Section 3 South Korea Other Faces of Capitalism (cont.) –In mid 1950s—one of poorest countries in Asia –Had highest population densitypopulation density –Began opening markets to world trade a few industries at a time Economic Systems and Economic Success

54. Section 3 Singapore Other Faces of Capitalism (cont.) –Offers generous tax breaks, government subsidies, and training of employees –Research and development spending is high—developing own technologies –Focuses on a few select industries Economic Systems and Economic Success

55. Section 3 Taiwan Other Faces of Capitalism (cont.) –Government concentrates on industries most likely to grow –Concern: People’s Republic of China regards Taiwan as a “renegade province.” Economic Systems and Economic Success

56. A.A B.B C.C D.D Section 3 The success South Korea has had in capitalism impacts you in what way? A.South Korea has no impact on my daily life. B.Increases my standard of living. C.My family may purchase a television or appliance manufactured in South Korea. D.Answers B and C apply.

57. Section 3-End

58. Stages of Economic Development Countries usually go through several stages of economic development, although the boundaries between these stages may overlap. VS 1

59. VS 2 Funding Economic Development Countries that need to develop their economies have a variety of funding sources available to them.

60. VS 3 Problems of Transition While capitalism provides a remarkable degree of economic growth, making a successful transition to capitalism can be difficult.

61. VS-End

62. Figure 1

63. Figure 2

64. Figure 3

65. Figure 4

66. Figure 5

67. Profile Karl Marx (1818–1883) published The Communist Manifesto in 1848 his ideas inspired communist revolutions

68. DFS Trans 1

69. DFS Trans 2

70. DFS Trans 3

71. Vocab1 developing country country with relatively low average per capita income and less developed infrastructure, education, and health care system

72. Vocab2 primitive equilibrium first stage of economic development during which the economy is stagnant

73. Vocab3 takeoff third stage of economic development when barriers of primitive equilibrium have been overcome

74. Vocab4 crude birthrate number of live births per 1,000 people

75. Vocab5 life expectancy average remaining life span in years for persons who attain a given age

76. Vocab6 zero population growth (ZPG) condition in which the average number of births and deaths balance so that population size is unchanged

77. Vocab7 external debt borrowed money that a country owes to foreign countries and banks

78. Vocab8 default the act of not repaying borrowed money

79. Vocab9 capital flight legal or illegal export of a nation’s currency and foreign exchange

80. Vocab10 proportion comparative relationship between things in terms of size, quantity, etc

81. Vocab11 primary most important

82. Vocab12 micro loan small, unsecured loan made primarily to women to help them undertake an income-generating project in a developing country

83. Vocab13 International Monetary Fund (IMF) international organization that offers advice, financial assistance, and currency support to all nations

84. Vocab14 World Bank international agency that makes loans and provides financial assistance and advice to developing countries

85. Vocab15 soft loan loan that may never be paid back

86. Vocab16 expropriation government confiscation of private- or foreign-owned goods without compensation

87. Vocab17 free-trade area group of countries that have agreed to reduce trade barriers among themselves but lack a common tariff barrier for nonmembers

88. Vocab18 customs union group of countries that have agreed to reduce trade barriers among themselves and have uniform tariffs for nonmembers

89. Vocab19 European Union (EU) economic, political, and social union established in 1993 by the Maastricht Treaty as the successor of the European Community

90. Vocab20 euro single currency of the EU introduced in January 2002 and adopted by many member nations

91. Vocab21 ASEAN group of 10 Southeast Asian nations working to promote regional cooperation, economic growth, and trade

92. Vocab22 cartel group of sellers or producers acting together to raise prices by restricting availability of a product

93. Vocab23 ethic moral principles; generally recognized rules of conduct

94. Vocab24 duration length of time

95. Vocab25 capitalism economic system in which private citizens own and use the factors of production in order to generate profits

96. Vocab26 privatization conversion of state-owned factories and other property to private ownership

97. Vocab27 vouchers certificate that could be used to purchase government-owned property during privatization

98. Vocab28 Five-Year Plan comprehensive, centralized economic plan used by the former Soviet Union to coordinate the development of industry and agriculture

99. Vocab29 Gosplan central authority in the former Soviet Union that devised and directed Five- Year Plans

100. Vocab30 collectivization forced common ownership of all agricultural, industrial, and trading enterprises used in former Soviet Union to boost output

101. Vocab31 perestroika fundamental restructuring of the Soviet economy introduced by Gorbachev

102. Vocab32 Great Leap Forward China’s second five-year plan that began in 1958 and forced rapid industrialization and collectivization of agriculture

103. Vocab33 Solidarity independent Polish labor union founded in 1980 by Lech Walesa

104. Vocab34 black market market in which economic products are sold illegally

105. Vocab35 capital-intensive production method requiring relatively large amounts of capital relative to labor

106. Vocab36 keiretsu independently owned group of Japanese firms governed by an external board of directors in order to regulate competition

107. Vocab37 population density number of people per square mile of land area

108. Vocab38 undertaking entering into an activity

109. Vocab39 isolationism national policy of not interacting with other countries

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