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Economics

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Economics Economic Development – PowerPoint PPT presentation

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Title: Economics


1
Economics
  • Economic Development

2
Economic Development
  • How advanced is a country?
  • More Developed - MDC
  • Newly Industrialized NIC
  • Less Developed LDC
  • Human Development Index
  • Developed by UN 1990, ranks countries by looking
    at economic development standards of living.
  • Indices Data Human Development Reports (HDR)
    United Nations Development Programme (UNDP)

3
Demographic Indicators
  • Life Expectancy average number of years a
    person is expected to live.
  • Birth Death Rates average number of children
    born and people who die in a year.
  • Death rate is called Mortality Rate.
  • Infant Mortality Rate number of infants who die
    before 1st birthday in year.

4
Economic Indicators
  • Gross Domestic Product GDP the total value of
    all goods services produced within a nation in
    a year.
  • GDP per capita per person in a country

5
Social Political Indicators
  • Social
  • Literacy Rate percentage of people who can read
    write.
  • Number attending college, number of
    professionals, housing, water supply sanitation
  • Political
  • Freedoms people enjoy, type of government,
    tolerance of other viewpoints.

6
  • MDC higher life expectancy, lower birth rate
    infant morality, higher literacy rates, more in
    college, more doctors, better water supply
    sanitation
  • LDC - lower life expectancy, higher birth rate
    infant morality, lower literacy rates, less in
    college, less doctors, poor water supply
    sanitation

7
  • Bangladesh LDC 129
  • Syria NIC 111
  • US MDC 4
  • France MDC 14
  • Zimbabwe LDC 169

8
Economic Activities Primary
  • Primary basic, food production extraction of
    raw materials
  • Examples farms, ranches, fishing, logging,
    mining.
  • LDC more people involved, MDC less people
  • US only 3 of labor force

9
Primary Economic Activities
10
Secondary Activities
  • Manufacturing Production taking raw materials
    adding value.
  • Textiles, furniture making, processing food,
    making steel

11
A Sawmill
Raw Material
Semi Finished Product
Finished Product
12
Processes To change Raw Materials into
semi-finished orfinished products we must
process them.
13

Processes
14
Tertiary Activities
  • Deals with services doctors, nurses, teachers,
    retailer (stores restaurants)
  • In the US, 80 of labor force
  • MDC have a higher percentage of their labor force
    in Tertiary activities.

15
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16
Quaternary Activities
  • Information processing management
  • Examples computer programmer, general manager,
    researchers, product development.
  • Jobs require special training education.
  • Only in the MDC

17
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18
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19
US Economy
  • Leader in agriculture, manufactured goods
    global trade.
  • 3 Factors Economic success
  • Abundant available natural resources
  • Skilled labor force
  • Stable political system

20
US cont.
  • Ag world leader fertile soil, favorable
    climate and early mechanization of farms
  • Industry advanced technology, petroleum, steel,
    chemicals, electronics telecommunication,
    lumber mining.
  • Postindustrial Economy manufacturing no longer
    plays a dominant role 80 of jobs are in the
    service industry

21
US cont.
  • Northeast New England Mid Atlantic
  • Americas Gateway
  • Fishing, farming, trade.
  • Coal, iron ore, oil, lumber, manufacturing,
    electronics, communication, chemical, medical
    research, finance, tourism.
  • Rust belt decline in the regions manufacturing
  • States ME, NH, VT, MA, CT, RI, NY, NJ, PA

22
US Cont.
  • Midwest Americas Breadbasket
  • Farming Fertile soil, adequate rainfall,
    favorable climate.
  • Feed more people than any comparable area in the
    world.
  • Corn, wheat, soybeans, meat, dairy
  • Trade, transportation, distribution Great Lakes
    Mississippi Ohio Rivers
  • Chicago transportation hub.
  • Auto making steel industries
  • States OH, MI, WI, MN, ND, SD, NE, KS, IA, MO,
    IL, IN

23
US Cont.
  • The South Sun Belt
  • Farming cotton, tobacco, fruits, peanuts, rice
    livestock
  • Air conditioning has allow area to grow. Many
    companies leaving cold north for the south.
  • Tourism retirees also drawn to warm South
    West.
  • States TX, LA, AR, TN, OK, KY, WV,
  • VA, NC, SC, GA, FL, AL, MS

24
US Cont.
  • The West -
  • ½ land of US, varied landscape, some
  • favorable landforms climate, also deserts
  • Air conditioning irrigation allowed growth
  • Farming, ranching, fishing, logging, mining, oil
    refining, tourism, film making, computers
  • States WA, OR, CA, NV, ID, MT, CO, WY, NM, AZ,
    HI, AK

25
Economic Alliances
  • NAFTA North American Free Trade Agreement
    began on January 1, 1994. This agreement removed
    most barriers to trade and investment among the
    United States, Canada, and Mexico with full
    implementation beginning January 1, 2008.

26
Economic Alliances
  • European Union
  • Economic and political union of 27 independent
    member states which are located primarily in
    Europe.
  • Purpose to create free trade zone
  • Austria, Belgium, Bulgaria, Cyprus, Czech Rep,
    Denmark, Estonia, Finland, France, Germany,
    Greece, Hungary, Ireland, Italy, Latvia,
    Lithuania, Luxembourg, Malta, Netherlands,
    Poland, Portugal, Romania, Slovakia, Slovenia,
    Spain, Sweden, UK

27
EU Policies
  • The EU has developed a single market through a
    standardized system of laws which apply in all
    member states.
  • Passport controls have been abolished within the
    EU.
  • EU policies aim to ensure the free movement of
    people, goods, services, and capital.
  • Enact equal laws, maintain common policies

28
EU Policies
  • The EU has established a single market across the
    territory of all its members.
  • A monetary union, the eurozone, using a single
    currency Euro.
  • In 2010 the EU generated an approx. 16.242
    billion international dollars of global gross
    domestic product (GDP) largest economy in the
    world.
  • Largest exporter and importer of goods and
    services.
  • Biggest trading partner to China, India, and the
    United States.

29
EU Problems
  • The Euro was to be a currency which would replace
    the U.S. dollar, but in 2009, a debt crisis
    arose.
  • In 2010 the debt crisis was mostly centered on
    events in Greece cost of financing government
    debt.
  • On 2 May 2010, the eurozone countries and the IMF
    agreed to a loan for Greece, it failed.
  • It was followed by a 85 billion rescue package
    for Ireland in November.
  • That was followed by a 78 billion bail-out for
    Portugal in May 2011.
  • October 2011 Greece bailout still a problem.

30
Global Implications of Crisis
  • EU losses could extend to American banks, which
    have large exposures to debt in France and Italy.
  • On top of this, American exports to the European
    Union could suffer if the crisis slows European
    growth and causes the euro to depreciate against
    the dollar.
  • The EU crisis also affects the cost of oil and
    the U.S. stock market.

31
Economic Alliances
  • ASEAN Association of South East Asia Nations
  • Alliance that promotes economic growth, peace,
    cooperation in SE Asia
  • Members Brunei, Cambodia, Indonesia, Laos,
    Malaysia, Myanmar, Philippines, Singapore,
    Thailand, Vietnam

32
OPEC
  • Organization of Petroleum Exporting Countries
  • Mission is to coordinate and unify the petroleum
    policies of its Member Countries and ensure the
    stabilization of oil markets in order to secure
    an efficient, economic and regular supply of
    petroleum to consumers, a steady income to
    producers and a fair return on capital for those
    investing in the petroleum industry.
  • Members Algeria, Angola, Ecuador, Iran, Iraq,
    Kuwait, Libya, Nigeria, Qatar, Saudi Arabia,
    United Arab Emirates, Venezuela

33
Outsourcing
  • the act of one company contracting with another
    to provide services that could be performed by
    in-house employees. These jobs are handled by
    separate companies that specialize in each
    service, and are often located overseas.
  • Advantages
  • Saves money, cheap labor
  • Allows companies to focus on product development
  • Outsource companies have specialized technology
    that the company cant afford to buy.

34
  • Finance Accounting
  • Recruitment Process
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    IT Roundtable
  • IT Jordan
  • Human Resources Outsourcing
  • Legal Processing Outsourcing
  • Business Process Outsourcing
  • Cloud Computing
  • Marketing
  • Telecom Expense Mgt
  • Selling Outsourcing
  • Outsourcing Relationship Mgt
  • Contact Center/Call Center
  • Advisor Support Center
  • Nearshoring
  • Travel Hospitality
  • Tech Sourcing Directions
  • Data Center Services
  • Finance Accounting
  • Document Management and BPO Improvement
  • Telecom Expense Management
  • Legal Corner
  • Russia A Vast Offshoring Frontier
  • China Trends Opportunities

35
Outsourcing
  • Disadvantages
  • eliminates direct communication between company
    and its clients.
  • prevent building solid relationships with
    customers
  • leads to dissatisfaction on one or both sides
  • not being able to control some aspects of the
    company
  • may lead to delayed communications project
    implementation.
  • sensitive information is more vulnerable
  • dependent upon its outsource providers, if
    outsource provider backs out on their contract
    suddenly.

36
Infrastructure
  • The basic support systems needed to keep an
    economy going.
  • Includes
  • Transportation Most important
  • Communications how linked to the world
  • Internet Satellite communication
  • Power
  • Water Sanitation
  • Education Systems

37
What is Development?
  • DEVELOPMENT
  • Reaching an acceptable standard of living for
    all people by improving economic and social
    conditions.
  • DEVELOPING COUNTRY
  • Low- and middle-income countries in which most
    people have a lower standard of living with
    access to fewer goods and services than do most
    people in high-income countries.
  • There are currently about 125 developing
    countries with populations over 1 million in
    1997, their total population was more than 4.89
    billion.

38
Levels Of Development
Quaternary Stage 3/4 Populations
  • Developed
  • Newly Industrialized
  • Developing

Modern cities Poor rural area Secondary Economic
Activities Tertiary Activities Stage 2 populations
Agricultural/Primary Activities Poverty Stage 1
population characteristics
39
Less Developed Country
  • low national income, GDP
  • high rate of population growth
  • High unemployment, dependence on commodity
    exports.
  • Majority of nations in Asia, Africa, and Latin
    America,
  • Low development of infrastructure

40
LDC
  • The Least Developed Countries represent the
    poorest and weakest segment of the international
    community.
  • More than 880 million people (about 12 of world
    population), but account for lt 2 of world GDP
    about 1 of global trade in goods .

41
Newly Industrialized Country
  • A country whose level of economic
    development ranks it between the less
    developed and more developed classifications.
  • Have moved from an agriculture-based economy to
    a more industrialized, urban economy,
    developing infrastructure.

42
NIC
  • NICs usually share some common features,
    including
  • Increased social freedoms and civil rights.
  • Strong political leaders.
  • A switch from agricultural to industrial
    economies, especially in the manufacturing
    sector.
  • An increasingly free enterprise economy, allowing
    free trade with other nations in the world.
  • Large national corporations operating in several
    continents.
  • Strong capital investment from foreign countries.
  • Political leadership in their area of influence.
  • Lowered poverty rates.

43
More Developed Country
  • A country with high levels of economic
    development infrastructure.
  • Indicators of development
  • low birth rate (lt 10) infant mortality rates (lt
    12 per thousand)
  • less than 10 of the workforce in agriculture
  • high levels of nutrition, secondary schooling,
    literacy, electricity consumption per person, and
    GDP per capitagenerally above US 20,?000 per
    capita.
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