Economic Growth

Open Ended

Trade is............

Multiple Choice

A barrier is meant to 

• make people obey the government 

• 
  encourage the flow of trade

• block or slow down trade

Multiple Choice

A tariff is a ______

• tax placed on imported goods

• a stop of all trade 

• a limit placed on imported goods

Multiple Choice

If a country limits the amount of an imported good, they are using a 

• embargo

• quota

• tariff

Multiple Choice

When a country refuses to trade with others it is participating in a trade ______

• tariff

• quota

• embargo

Multiple Choice

In 2010, Mexico imposed a limit of 250,000 tons of sugar that could be imported into Mexico.

• embargo

• quota

• tariff

Multiple Choice

________________ occurs when different countries choose to engage in the exchange of goods with one another.

• Crimes

• Specialization

• Tariffs

• Voluntary Trade

Multiple Choice

What is an exchange rate?

• The rate at which goods are exchanged between two countries

• How many US dollars you can exchange for RMB at Travelex

• The price of goods in terms of a foreign currency

• 
  The price of one nation's currency in terms of another's

Multiple Choice

Which of the following BEST explains why countries choose to specialize?

• They want to be independent from other nations

• They can produce goods at a lower opportunity cost than other nations

• They have unlimited resources to make everything

• They want to avoid international trade

Multiple Choice

What potential risk does a country face when it over-specializes in one product?

• It might make too much profit

• It will have too many trading partners

•  Its economy could suffer if demand for that product drops

• It will produce too many different products

Multiple Choice

Which statement BEST explains how specialization encourages trade?

• Countries make everything they need

• Countries avoid trading with others

• Countries produce what they're best at and trade for other needs

• Countries only produce luxury goods

The Factors
of Economic
Growth

Southern and Eastern Asia

SS7E9

Unit 6

Standard

SS7E9 Describe factors that influence economic growth and examine their presence or
absence in China, India, Japan, South Korea and North Korea.

a.

Evaluate how literacy rates affect the standard of living.

b.

Explain the relationship between investment in human capital (education and training) and
gross domestic product (GDP per capita).

c.

Explain the relationship between investment in capital goods (factories, machinery, and
technology) and gross domestic product (GDP per capita).

d.

Describe the role of natural resources in a country’s economy.

e.

Describe the role of entrepreneurship.

Learning Target

I can explain the purpose of productive resources

and distinguish between natural resources, human

capital, and capital goods.

GDP in Southern and Eastern Asia

What is the best way to decide if a

nation’s economy is in good

shape?

• A balanced budget?

• A skilled labor force?

Economists think the best indicator

for a strong economy is gross

domestic product, or GDP.

• GDP represents the total value of

the goods and services the
economy produces each year.

• GDP per capita (per person)

usually points to the standard of
living in that country.

Examples of GDP Per Capita
in Southern and Eastern Asia

Some of the figures approach what you saw
in modern European countries. But note the
wide variation and how low GDP per capita is
in some countries.

GDP Per Capita (2020)

for Select Asian Countries

China

$16,400

India

$6,100

Indonesia

$11,400

Japan

$41,430

Laos

$7,800

Malaysia

$26,400

Myanmar

$1,400

North Korea

$1,700

South Korea

$42,300

Thailand

$17,300

What Else Drives Economic Growth?

•Government policies are important in determining how much economic growth is enjoyed
by countries in Southern and Eastern Asia.

•However, 4 other factors influence economic growth and the country’s standard of living*.

1.

natural resources

2.

human capital

3.

capital goods

4.

entrepreneurship

•The more each factor is present in a country, the better the economy typically performs.

*standard of living: level of wealth and material comfort available in a country .

Natural Resources

Natural resources are one of the 4 key factors that

affect a country’s economic growth. Countries of

Southern and Eastern Asia have faced challenges

with overuse of certain resources and heavy

environmental pollution. Still, each country has

certain natural resources in abundance, like

farmland in China and copper in India. The nations

have used these natural resources to establish

markets for certain key products.

Investing in Human
Capital and Capital
Goods

Governments of Southern and

Eastern Asia can decide to

invest public money in human

capital. Tax dollars would be

spent on elementary, middle,

and high schools, and on

colleges and universities, so that

the work force is well educated

and ready to be productive. Or

governments and private

companies might invest in job

training programs.

Investing in Human Capital and Capital Goods

Countries in Southern and Eastern Asia generally invest less of their budgets in K-12 education

than other developed countries around the world. However, the region’s governments are now

increasing investment in colleges and universities to better compete economically.

Governments in South Korea, Japan, China, and India do devote large sums from their national

budgets to programs to train their people for particular jobs and industries. North Korea does

not have the resources to invest in training.

Investing in Human Capital and Capital Goods

Governments in India, Japan, China, and South Korea each have decided to invest aggressively

in capital goods such as new factories and machinery. These investments have helped their

economies succeed. But North Korea has under-invested in capital goods for a number of

years.

Literacy Rate

Generally, literacy rates in Southern and

Eastern Asia are above the worldwide

average. However, India is struggling with

educating its people, especially in remote

areas, and with basic reading and writing.

Country

Literacy Rate

Worldwide Average

86.3%

China

96.8%

India

77.7%

Indonesia

99%

Japan

99%

Laos

84.66%

Malaysia

94.85%

Myanmar

89.5%

North Korea

99%

South Korea

97.9%

Thailand

93.77%

Literacy Rate

•Literacy means someone can read and write.

•A country’s literacy rate is the percentage of its adults who can read and write.

•Businesses are willing to pay higher wages to an employee who can comprehend written
material and communicate well.

•Thus, a person’s literacy is tied to their standard of living.

Entrepreneurship in Southern and Eastern Asia

Entrepreneurship helps develop new jobs in a country’s economy. Entrepreneurs
figure out new ways of doing business that can lead to new or more efficient industry
sectors.

Among the Southern and Eastern Asian countries you have studied, South Korea
does an excellent job creating a culture that welcomes and supports entrepreneurs.
Japan, in recent years, also has a record of helping entrepreneurs succeed. On the
other hand, India’s extensive regulations and cultural biases (caste system) can make
it very difficult for someone trying to launch a new business.

Multiple Choice

A country wants to improve its economic growth. Which combination of factors would MOST likely lead to success?

• Natural resources and entrepreneurship only

• Human capital and natural resources only

• Capital goods and literacy only

• All four factors: natural resources, human capital, capital goods, and entrepreneurship

Multiple Choice

What relationship exists between literacy rates and standard of living?

• There is no connection between the two

• Higher literacy rates generally correlate with higher standards of living

• Lower literacy rates lead to better economic outcomes

• Literacy only affects government workers

Multiple Choice

Which economic challenge does North Korea face compared to its neighbors?

What relationship exists between literacy rates and standard of living?

• Under-investment in capital goods and training

• Too much investment in education

• Excessive entrepreneurship

• Over-reliance on technology