Study Notes
Barriers to economic development are factors that hinder low-income countries from achieving economic prosperity and improving well-being. Poverty Cycle — self-reinforcing mechanisms that cause poverty to persist across generations. Example: Low income leads to low savings and investment, resulting in low productivity and income growth. Rising Economic Inequality — unequal distribution of income and wealth that limits opportunities and growth. Example: Inequality in education and health leads to lower employment opportunities. Limited Access to Infrastructure and Technology — lack of well-developed infrastructure that supports economic growth. Example: Poor transport networks and limited electricity access hinder economic activities. Dependence on Primary Production — reliance on natural resources and primary commodities for economic activity. Example: Countries relying on agriculture face risks due to price volatility. Limited Access to International Markets — challenges in exporting goods to developed countries. Example: High tariffs and subsidies in developed countries limit market access for developing nations.
Exam Tips
Key Definitions to Remember
- Poverty Cycle: Self-reinforcing mechanisms causing persistent poverty.
- Rising Economic Inequality: Unequal distribution of income and wealth.
- Limited Access to Infrastructure: Lack of developed infrastructure for economic growth.
- Dependence on Primary Production: Reliance on natural resources for economic activity.
Common Confusions
- Confusing poverty cycle with temporary poverty.
- Misunderstanding the role of infrastructure in economic development.
Typical Exam Questions
- What is a poverty cycle? A poverty cycle is a self-reinforcing mechanism causing persistent poverty across generations.
- How does rising economic inequality affect development? It limits opportunities and growth by creating disparities in education and health.
- Why is dependence on primary production risky? It exposes countries to price volatility and limits economic diversification.
What Examiners Usually Test
- Understanding of how poverty cycles operate.
- The impact of economic inequality on development.
- The role of infrastructure in supporting economic growth.