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1. Splash Screen

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

3. 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. Chapter Intro 1

4. 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. Chapter Intro 2

5. Chapter Intro-End

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

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

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

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

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

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

12. 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 Section 1

13. 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. Section 1

14. A B C 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 Section 1

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

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

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

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

19. Obstacles to Development (cont.) • Challenges facing developing countries • Population growth • Highcrude birthrate • Increase inlife expectancy • Zero population growth (ZPG) • Limited natural resources and geography • Disease and substance abuse Section 1

20. Obstacles to Development (cont.) • Education and technology • External debt • Defaulton loans • Corruption • War and its aftermath • Capital flight The Corruption Perception Index Section 1

21. A B C D 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 Section 1

22. Section 1-End

23. 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. Section 2-Preview

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

25. A B C 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 Section 2

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

27. Funding Economic Development (cont.) • Sources of funding for economic development • Internal savings • Micro loans • International Monetary Fund (IMF) • World Bank Group • Soft loansmade to the neediest countries Section 2

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

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

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

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

32. Regional Economic Cooperation (cont.) • ASEAN • OPEC • Cartel The European Union Section 2

33. A B C D 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. Section 2

34. Section 2-End

35. 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. Section 3-Preview

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

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

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

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

40. 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. • Privatization Profiles in Economics:Karl Marx Section 3

41. 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. Section 3

42. A B C D 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 Section 3

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

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

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

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

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

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

49. A B C D 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 Section 3

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