Developing Countries

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Developing CountriesDeveloping CountriesSECTION 1: Economic Development

SECTION 2: Challenges to Growth

SECTION 3: Paths to Economic Development

CHAPTER 17

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Objectives:Objectives:What characteristics do developing countries

have in common?How can scarcity of resources affect a

developing nation?

Economic DevelopmentEconomic DevelopmentSECTION 1

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Characteristics of developing Characteristics of developing countries:countries: low per capita GNI limited or insufficient use of resourceshigh population growth ratedependence on agricultural production


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Potential effects of resource scarcity Potential effects of resource scarcity on a developing nation:on a developing nation: inability to compete in the global

marketplace inability to trade limited economic growthdependence on a subsistence agriculture


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Objectives:Objectives:How do many developing countries respond

to scarce factors of production?How can the status of an economic

infrastructure help or hinder a developing country?

How can political instability challenge a developing nation?

Challenges to GrowthChallenges to GrowthSECTION 2

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Many developing countries’ response Many developing countries’ response to scarce factors of production:to scarce factors of production: specialization in the production of goods increased spending on primary and

secondary educationnationalization, expropriation, and

privatization of industries and businesses


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Impact of an economic infrastructure Impact of an economic infrastructure on a developing country:on a developing country: can limit or expand development can discourage or promote production and trade can restrict or improve development of human

resources can discourage or encourage savings and

investment can lead to nationalization, expropriation, and

privatization of industries and businesses


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Potential effects of instability on a Potential effects of instability on a developing nation:developing nation:can discourage foreign investmentcan disrupt normal business activitycan destroy capital investmentcan restrict economic development


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Objectives:Objectives:What are the characteristics of the socialist

and capitalist models of decision making?What types of aid do governments extend to

developing countries?What are the key public sources of foreign

aid?

Paths to Economic DevelopmentPaths to Economic Development

SECTION 3

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Characteristics of the socialist model Characteristics of the socialist model of decision making:of decision making:ability of government to direct and redirect

resources and production toward specific economic goals

inefficiencybureaucratic resistance to changecorruption


SECTION 3

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Characteristics of the capitalist model Characteristics of the capitalist model of decision making:of decision making: freedom to make economic decisionsdifficulty in redirection of resources and

production toward specific economic goals


SECTION 3

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Types of aid governments extend to Types of aid governments extend to developing countries:developing countries:economic assistancemilitary aidemergency assistance


SECTION 3

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Key public sources of foreign aid:Key public sources of foreign aid: the World Bank the International Monetary Fund the United Nations regional organizations


SECTION 3

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1.1. How is per capita GNI used to classify developing nations?

2.2. What are developing nations’ three major obstacles to capital formation?

3.3. Why is scarcity a problem for developing nations?4.4. How can leaders influence economic growth and

development in a nation that uses the capitalist decision-making model?

5.5. Provide an example of each of the following: economic assistance, military assistance, and emergency assistance.

Wrap-UpWrap-Up

CHAPTER 17

Developing Countries

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