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Presentation Plus! Economics: Today and Tomorrow Copyright © by The Mc. Graw-Hill Companies, Inc. Presentation Plus! Economics: Today and Tomorrow Copyright © by The Mc. Graw-Hill Companies, Inc. Developed by FSCreations, Inc. , Cincinnati, Ohio 45202 Send all inquiries to: GLENCOE DIVISION Glencoe/Mc. Graw-Hill 8787 Orion Place Columbus, Ohio 43240 1

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CHAPTER FOCUS SECTION 1 Characteristics of Developing Nations SECTION 2 The Process of Economic CHAPTER FOCUS SECTION 1 Characteristics of Developing Nations SECTION 2 The Process of Economic Development SECTION 3 Obstacles to Growth in Developing Nations SECTION 4 Industrialization and the Future CHAPTER SUMMARY CHAPTER ASSESSMENT 3 Click a hyperlink to go to the corresponding section. Press the ESC key at any time to exit the presentation.

Why It’s Important How can developing countries become industrialized? Why should Americans be concerned Why It’s Important How can developing countries become industrialized? Why should Americans be concerned about the economies of these countries? This chapter will explain how developing countries work to become part of the global economy. Click the Speaker button to listen to Why It’s Important. 4

Chapter Overview Chapter 20 outlines the characteristics of developing nations, describes the obstacles to Chapter Overview Chapter 20 outlines the characteristics of developing nations, describes the obstacles to growth that developing nations face, and reviews the possible future for developing nations. 5

6 Click the mouse button to return to the Contents slide. 6 Click the mouse button to return to the Contents slide.

Reader’s Guide Section Overview Section 1 compares developed nations and developing nations and discusses Reader’s Guide Section Overview Section 1 compares developed nations and developing nations and discusses the factors that economists use to measure economic development. Objectives – About how many nations in the world are considered developed? – What are five economic characteristics of developing nations? – Why have poorly defined property rights been a problem in developing countries? 7 Click the mouse button or press the Space Bar to display the information. Section 1 begins on page 517 of your textbook.

Reader’s Guide (cont. ) Terms to Know – developed nations – developing nations – Reader’s Guide (cont. ) Terms to Know – developed nations – developing nations – subsistence agriculture – infant mortality rate Click the Speaker button to listen to the Cover Story. 8 Click the mouse button or press the Space Bar to display the information. Section 1 begins on page 517 of your textbook.

Introduction • Many Americans may not realize it, but even the poorest families in Introduction • Many Americans may not realize it, but even the poorest families in the United States usually have an income far above the average income in much of the rest of the world. • About one-half of the world’s population lives at or close to subsistence, with just enough to survive. • In this section, you’ll learn about the characteristics of these developing countries. 9 Click the mouse button or press the Space Bar to display the information.

Lecture Launcher • The United Nations has several projects that provide economic and humanitarian Lecture Launcher • The United Nations has several projects that provide economic and humanitarian aid for developing countries. One project for Gambia aims to build 120 new wells, improve and fix 60 other wells, and develop and install pipes for water supplies in larger villages. • How important is availability of water to the citizens of a country? 10 Click the mouse button or press the Space Bar to display the information.

Developed vs. Developing Nations • Only 35 of the more than 192 world nations Developed vs. Developing Nations • Only 35 of the more than 192 world nations are considered developed nations; the rest are developing nations. • The only common factors of developing nations are that they have less industrial development and a relatively low standard of living. 11 Click the mouse button or press the Space Bar to display the information.

Developed vs. Developing Nations (cont. ) Figure 20. 1 Two Developing Nations Among developing Developed vs. Developing Nations (cont. ) Figure 20. 1 Two Developing Nations Among developing nations there is a wide variance in standards of living. 12

Discussion Questions Why do you think that the lack of industrial development goes together Discussion Questions Why do you think that the lack of industrial development goes together with a low standard of living? Possible response: An increased standard of living comes from economic growth and development. Industry creates such growth. Without the industry vase, the countries might be meeting basic needs and their economy may not grow at all, or may only grow at a very slow pace. 13 Click the mouse button or press the Space Bar to display the answer.

Economic Characteristics • Very low GDP per capita • Natural and human resources, but Economic Characteristics • Very low GDP per capita • Natural and human resources, but not enough capital or knowledge to use those resources to their full potential • Agricultural economies; most families living at a subsistence level 14 Click the mouse button or press the Space Bar to display the information.

Economic Characteristics (cont. ) • Poor health conditions, including shortages of doctors and medical Economic Characteristics (cont. ) • Poor health conditions, including shortages of doctors and medical care, and high infant mortality rates • Low literacy rates; a large percentage of people who cannot read or write • Rapid population growth 15 Click the mouse button or press the Space Bar to display the information.

Economic Characteristics (cont. ) Figure 20. 2 Measuring GDP There is a huge difference Economic Characteristics (cont. ) Figure 20. 2 Measuring GDP There is a huge difference in per capita GDP between developing and developed countries. 16

Economic Characteristics (cont. ) Figure 20. 3 Comparing Nations Basic needs such as food Economic Characteristics (cont. ) Figure 20. 3 Comparing Nations Basic needs such as food and shelter are not met in many developing nations. 17

Discussion Questions What are some possible effects of poor health care on the labor Discussion Questions What are some possible effects of poor health care on the labor force? Possible response: People are unable to work at their full strength or capacity because they suffer from illnesses that could be easily treatable with proper medicines. More people are permanently disabled due to illness and injury. 18 Click the mouse button or press the Space Bar to display the answer.

Weak Property Rights • In many developing nations, there are less well-defined, government-protected private Weak Property Rights • In many developing nations, there are less well-defined, government-protected private property rights. • Peru is one such country, with 80 percent of the land having no private owner. • No large-scale farming occurs because individual farmers cannot buy and sell land. • The peasant farmers have little incentive to improve the value of the property. 19 Click the mouse button or press the Space Bar to display the information.

Discussion Question How might peasant farmers behave differently if they owned their property? Some Discussion Question How might peasant farmers behave differently if they owned their property? Some farmers might try to make their land valuable so they could sell it and give up farming. Others might try to form co-ops and gather their resources, because they would have ownership of their portion. Still others might try to earn extra money to buy more land. 20 Click the mouse button or press the Space Bar to display the answer.

Section Assessment About how many nations in the world are considered developed? About 35 Section Assessment About how many nations in the world are considered developed? About 35 countries in the world are considered developed. 21 Click the mouse button or press the Space Bar to display the answer.

Section Assessment (cont. ) Graphic Organizer Create a diagram like the on page 521 Section Assessment (cont. ) Graphic Organizer Create a diagram like the on page 521 of your textbook to explain five economic characteristics of developing nations. The following labels should be placed in outer ovals: Low GDP, Agricultural Economy, Poor Health Conditions, Low Literacy Rate, and Rapid Population Growth. 22 Click the mouse button or press the Space Bar to display the answer.

Section Assessment (cont. ) Why have poorly defined property rights been a problem in Section Assessment (cont. ) Why have poorly defined property rights been a problem in developing countries? Governments in developing countries tend not to support a system of strong, well-defined property rights. Without ownership rights, farmers have little incentive to improve the land they work. 23 Click the mouse button or press the Space Bar to display the answer.

Section Assessment (cont. ) Categorizing Information Using Figure 20. 3 for your data, input Section Assessment (cont. ) Categorizing Information Using Figure 20. 3 for your data, input the information in a database. Sort the data by infant mortality, by life expectancy, and then by access to safe drinking water. Print out the new tables. Which country in your database has the highest infant mortality rate? Which country has the lowest life expectancy? Which two countries’ populations have the highest access to safe drinking water? 24 Click the mouse button or press the Space Bar to display the answer.

Section Assessment (cont. ) Mozambique has the highest infant mortality rate. Ethiopia has the Section Assessment (cont. ) Mozambique has the highest infant mortality rate. Ethiopia has the lowest life expectancy. Australia and Israel have the highest percentage of population with access to safe drinking water. 25 Click the mouse button or press the Space Bar to display the answer.

Section Close Based on information in Section 1, how do you think your everyday Section Close Based on information in Section 1, how do you think your everyday life compares to that of a young person living in a developing nation? 26

27 Click the mouse button to return to the Contents slide. 27 Click the mouse button to return to the Contents slide.

Reader’s Guide Section Overview Section 2 examines the ways of financing economic development, identifies Reader’s Guide Section Overview Section 2 examines the ways of financing economic development, identifies the major sources of foreign aid, and analyzes the reasons for giving foreign aid. Objectives – Where do developing countries obtain outside sources of financing for economic development? – What agencies channel aid from major industrial nations to developing nations? – Why do nations give foreign aid? 28 Click the mouse button or press the Space Bar to display the information. Section 2 begins on page 523 of your textbook.

Reader’s Guide (cont. ) Terms to Know – nationalization – foreign aid – economic Reader’s Guide (cont. ) Terms to Know – nationalization – foreign aid – economic assistance – technical assistance – military assistance Click the Speaker button to listen to the Cover Story. 29 Click the mouse button or press the Space Bar to display the information. Section 2 begins on page 523 of your textbook.

Introduction • Most nations pass through three stages of economic development. • The first Introduction • Most nations pass through three stages of economic development. • The first is the agricultural stage, when most of the population has jobs in farming. • The second is the manufacturing stage, when much of the population has jobs in industry. 30 Click the mouse button or press the Space Bar to display the information.

Introduction (cont. ) • In the third stage, many workers shift into the service Introduction (cont. ) • In the third stage, many workers shift into the service sector–sales, food service, repair work, and computer and Internet services. • In this section, you’ll learn how developing nations use foreign investment and aid to move through the three stages of economic development. 31 Click the mouse button or press the Space Bar to display the information.

Lecture Launcher • According to a recent poll 80% of Americans agree that the Lecture Launcher • According to a recent poll 80% of Americans agree that the United States should provide foreign aid. A strong majority, however, say that the United States is spending too much. But this attitude is based on the assumption that the U. S. is spending 15% of its budget on foreign aid. When informed that the U. S. is currently spending about 1% of the national budget on foreign aid, 46% said the amount was about right, 18% said it was still too much, and 33% said it was to “too little. ” 32 Click the mouse button or press the Space Bar to display the information.

Lecture Launcher • Another poll showed that Americans think that helping developing countries will Lecture Launcher • Another poll showed that Americans think that helping developing countries will improve world prosperity (84%), ensure world peace (80%), and help the U. S. economy (72%). • How can foreign aid promote the process of economic development? • What are three stages of economic development? 33 Click the mouse button or press the Space Bar to display the information.

Financing Economic Development • A basic problem for many developing nations is how to Financing Economic Development • A basic problem for many developing nations is how to finance the equipment and training necessary to improve their standard of living. • Even very poor people save, but their savings are not in form of money capital that can be invested. • Foreign corporations set up branch offices or companies in the developing nation. 34 Click the mouse button or press the Space Bar to display the information.

Financing Economic Development (cont. ) • However the foreign investor takes a risk because Financing Economic Development (cont. ) • However the foreign investor takes a risk because there may be political instability in the country, and citizens of the developing nation lose economic control when foreigners control their resources. • Foreign aid can be given to the developing nation by governments and private organizations in many forms. • Economic assistance: providing loans and money/capital donations. 35 Click the mouse button or press the Space Bar to display the information.

Financing Economic Development (cont. ) • Technical assistance: providing professionals to train and teach Financing Economic Development (cont. ) • Technical assistance: providing professionals to train and teach skills to local population. • Military assistance: providing the nation’s armed forces with money or people who teach and train. 36 Click the mouse button or press the Space Bar to display the information.

Financing Economic Development (cont. ) Figure 20. 4 The Agricultural Stage Many developing nations Financing Economic Development (cont. ) Figure 20. 4 The Agricultural Stage Many developing nations have a large labor force and the natural resources necessary for an industrial economy. They sometimes lack the financing, capital, and trained personnel to put these resources to work, however. 37

Discussion Question Do you think that foreign aid is always beneficial to a developing Discussion Question Do you think that foreign aid is always beneficial to a developing nation? Explain your reasoning. Possible responses: I think helping people is always beneficial. Some aid might come with too much control on the part of the giver, and this control can itself hinder development and morale of the nation. 38 Click the mouse button or press the Space Bar to display the answer.

Who Supplies Foreign Aid? • While the U. S. gives a large dollar amount Who Supplies Foreign Aid? • While the U. S. gives a large dollar amount in aid, it is a low percentage of its GDP when compared to other countries. • The U. S. channels a lot of its aid through the Agency for International Development (AID). • The United Nations has agencies that distribute funds to developing nations. 39 Click the mouse button or press the Space Bar to display the information.

Who Supplies Foreign Aid? (cont. ) • The International Monetary Fund (IMF) has recently Who Supplies Foreign Aid? (cont. ) • The International Monetary Fund (IMF) has recently become a major foreign aid agency. • Many developing nations are unable to repay the loans they have received in foreign aid. 40 Click the mouse button or press the Space Bar to display the information.

Discussion Question Since many developing nations find themselves unable to repay their loans, should Discussion Question Since many developing nations find themselves unable to repay their loans, should developed nations lend them money? Is this actually helping or hurting the developing countries? Explain. Answers may vary. Students should demonstrate a clear understanding of the dilemma: a country that is facing bankruptcy may be no better off than it was before the loan. 41 Click the mouse button or press the Space Bar to display the answer.

Reasons for Giving Financial Aid • Humanitarianism is the desire to relieve human suffering, Reasons for Giving Financial Aid • Humanitarianism is the desire to relieve human suffering, and a major goal of private aid organizations. • It is in the best economic interest of developed nations to help because it will create more trading partners and investment opportunities. • Political objectives, such as creating allies. 42 Click the mouse button or press the Space Bar to display the information.

Reasons for Giving Financial Aid (cont. ) • To help develop a military alliance, Reasons for Giving Financial Aid (cont. ) • To help develop a military alliance, a developed nation will give economic aid. • If the developing nation’s government changes hands, the new government may be hostile to the developed nation, and use its military equipment against them. 43 Click the mouse button or press the Space Bar to display the information.

Discussion Question Think of some different scenarios in which people and nations help others Discussion Question Think of some different scenarios in which people and nations help others for humanitarian reasons. What are some ways that people help, besides donating money? Possible scenarios: famine, refugees from war, natural disasters, such as earthquakes and volcano eruptions. People and nations help by donating food, clothing, medical supplies, or clean water; they volunteer their services as doctors, nurses, construction workers, etc. 44 Click the mouse button or press the Space Bar to display the answer.

Section Assessment Where do developing countries obtain outside sources of financing for economic development? Section Assessment Where do developing countries obtain outside sources of financing for economic development? through investments by foreign businesses and foreign aid from developed nations 45 Click the mouse button or press the Space Bar to display the answer.

Section Assessment (cont. ) What agencies channel aid from major industrial nations to developing Section Assessment (cont. ) What agencies channel aid from major industrial nations to developing nations? U. S. Agency for International Development (USAID); the World Bank and its affiliates, the International Development Association (IDA) and the International Finance Corporation (IFC); and the International Monetary Fund (IMF) 46 Click the mouse button or press the Space Bar to display the answer.

Section Assessment (cont. ) Graphic Organizer Create a diagram like the on page 528 Section Assessment (cont. ) Graphic Organizer Create a diagram like the on page 528 of your textbook to explain why nations give foreign aid. The following labels should be placed below arrows: Humanitarian Reasons, Economic Reasons, Political Reasons, and National Security Reasons. 47 Click the mouse button or press the Space Bar to display the answer.

Section Assessment (cont. ) Distinguishing Fact From Opinion Based on the information under the Section Assessment (cont. ) Distinguishing Fact From Opinion Based on the information under the heading “Reasons for Giving Foreign Aid, ” write an opinion article titled “The Most Important Reason for Giving Foreign Aid. ” Answers will vary. Ensure that students support their answers with valid reasons. 48 Click the mouse button or press the Space Bar to display the answer.

Section Close Discuss the following statement: Money that goes foreign aid would be better Section Close Discuss the following statement: Money that goes foreign aid would be better spent on societal and economic problems at home. 49

50 Click the mouse button to return to the Contents slide. 50 Click the mouse button to return to the Contents slide.

Reader’s Guide Section Overview Section 3 describes the obstacles to economic growth in developing Reader’s Guide Section Overview Section 3 describes the obstacles to economic growth in developing nations and investigates why Indonesia was unable to sustain rapid economic growth. Objectives – What are the main obstacles to economic growth in developing nations? – Why did Indonesia fail to sustain rapid economic growth? 51 Click the mouse button or press the Space Bar to display the information. Section 3 begins on page 529 of your textbook.

Reader’s Guide (cont. ) Terms to Know – bureaucracies – capital flight Click the Reader’s Guide (cont. ) Terms to Know – bureaucracies – capital flight Click the Speaker button to listen to the Cover Story. 52 Click the mouse button or press the Space Bar to display the information. Section 3 begins on page 529 of your textbook.

Introduction • The successful rebuilding of Europe’s economy following World War II convinced many Introduction • The successful rebuilding of Europe’s economy following World War II convinced many economists that injections of money capital into a nation could achieve rapid economic growth. • As a result, billions of dollars flowed into developing nations during the 1950 s and 1960 s. • Aid to many of these nations, however, failed to produce the same growth as Europe experienced. 53

Introduction (cont. ) • In this section, you’ll learn why developing nations have not Introduction (cont. ) • In this section, you’ll learn why developing nations have not followed the same path of recovery as Europe did in the 1940 s. 54

Lecture Launcher • In 1970, 60 percent of Indonesians lived below the poverty line. Lecture Launcher • In 1970, 60 percent of Indonesians lived below the poverty line. By 1996, that number decreased to 11 percent. Unfortunately, 1997 -1998 brought several economic setbacks that brought to light the need for meaningful political and economic reforms. The new government has promised to allow the formation of new political parties, allowed greater freedom of the press, released numerous political prisoners, and punished highranking officers for the kidnapping of activists and other misdeeds. 55

Lecture Launcher (cont. ) • Worker rights are now officially recognized but the enforcement Lecture Launcher (cont. ) • Worker rights are now officially recognized but the enforcement of labor standards remains weak. • Why is financial investment more effective in promoting growth in some countries than others? • Must a strong government that supports human rights be in place before the obstacles to economic growth can be removed? 56

Four Obstacles to Growth • People don’t trust innovation and technology, they are comfortable Four Obstacles to Growth • People don’t trust innovation and technology, they are comfortable with the old way of doing things. • The population is growing faster than the nation’s GDP. • Corrupt governments and poor allocation of resources (capital flight). • Trade restrictions in developed nations make it difficult or impossible to increase exports. 57 Click the mouse button or press the Space Bar to display the information.

Discussion Questions Which of the four obstacles do you think is the most detrimental Discussion Questions Which of the four obstacles do you think is the most detrimental to development? Why? Answers may vary. Students should be able to demonstrate a clear understanding of the impact of each obstacle. 58 Click the mouse button or press the Space Bar to display the answer.

Case Study: Indonesia • Indonesia had a large population and a variety of rich Case Study: Indonesia • Indonesia had a large population and a variety of rich natural resources. • The country received $2 billion in foreign aid, but still the economy was a disaster. • The people did not have a national identity and were divided by nationality, religion, and politics. • The economy under the leadership of Sukarno was a disaster. 59 Click the mouse button or press the Space Bar to display the information.

Case Study: Indonesia • General Suharto brought improvements, but relied too heavily on oil Case Study: Indonesia • General Suharto brought improvements, but relied too heavily on oil so that the economy was hit hard by the oil crisis in the 1980 s, and further suffered from the economic crisis of 1997 -98. • Money alone does not enable a country to experience economic growth. • Governments must loosen their restrictions on the economy. 60 Click the mouse button or press the Space Bar to display the information.

Case Study: Indonesia • Foreign aid, domestic savings, foreign investment, and government policies must Case Study: Indonesia • Foreign aid, domestic savings, foreign investment, and government policies must all work together. • Depending upon only one or two products leads to only a temporary economic growth. 61 Click the mouse button or press the Space Bar to display the information.

Case Study: Indonesia (cont. ) Figure 20. 7 Indonesia’s Economy Under Sukarno and Suharto Case Study: Indonesia (cont. ) Figure 20. 7 Indonesia’s Economy Under Sukarno and Suharto 62

Discussion Question How might things have been different in Indonesia if they had a Discussion Question How might things have been different in Indonesia if they had a new leader every 4 to 8 years, rather than one leader for over 30 years? Possible response: Other leaders might have had different economic policies, possibly leading to the development of other businesses. The people might be able to promote leaders that they believed in. Also, each leader would not have been able to use as much of the government funds for his own use. 63 Click the mouse button or press the Space Bar to display the answer.

Section Assessment Graphic Organizer Create a diagram like the on page 532 of your Section Assessment Graphic Organizer Create a diagram like the on page 532 of your textbook to explain the main obstacles to economic growth in developing nations. The following should be inserted in the diagram: Attitudes and Beliefs, Continued Rapid Population Growth, Misuse of Resources, and Trade Restrictions. 64 Click the mouse button or press the Space Bar to display the answer.

Section Assessment (cont. ) Why did Indonesia fail to sustain rapid economic growth? President Section Assessment (cont. ) Why did Indonesia fail to sustain rapid economic growth? President Sukarno’s policies of nationalization and regulating business caused economic problems. These were made worse by a huge government bureaucracy and rampant corruption. Also, Indonesia’s reliance on a few products made the economy vulnerable. 65 Click the mouse button or press the Space Bar to display the answer.

Section Assessment (cont. ) Understanding Cause and Effect Explain why import restrictions are an Section Assessment (cont. ) Understanding Cause and Effect Explain why import restrictions are an obstacle to growth in a developing nation. Why do developing nations impose import restrictions such as quotas and tariffs in the first place? Import restrictions prevent consumers from buying cheaper substitutes. Competition from foreign companies might make domestic companies more efficient. However, developing nations impose import restrictions to protect these domestic companies. 66 Click the mouse button or press the Space Bar to display the answer.

Section Close Which of the obstacles to economic growth do you think developing nations Section Close Which of the obstacles to economic growth do you think developing nations will have the greatest trouble overcoming? Why? 67

68 Click the mouse button to return to the Contents slide. 68 Click the mouse button to return to the Contents slide.

Reader’s Guide Section Overview Section 4 reviews the problems associated with rapid industrialization in Reader’s Guide Section Overview Section 4 reviews the problems associated with rapid industrialization in developing countries and explains the factors that determine the various routes to economic development. Objectives – What are four problems of rapid industrialization in developing nations? – In addition to poverty, what factors influence economic development? – What is the relationship between the increased flow of information and international economic cooperation? 69 Click the mouse button or press the Space Bar to display the information. Section 4 begins on page 534 of your textbook.

Reader’s Guide (cont. ) Term to Know – vicious cycle of poverty Click the Reader’s Guide (cont. ) Term to Know – vicious cycle of poverty Click the Speaker button to listen to the Cover Story. Section 4 begins on page 534 of your textbook. 70

Introduction • The high standard of living of any developed nation is usually a Introduction • The high standard of living of any developed nation is usually a result of its high level of industrialization. • Industrialization is the second stage of economic development. • As a result, many developing nations have tried to improve their standard of living by shifting their resources away from agriculture to industry. • In this section, you’ll learn that attempts at rapid industrialization can prove a wasteful use of scarce resources. 71 Click the mouse button or press the Space Bar to display the information.

Lecture Launcher • In a period of only three decades the breakdown of the Lecture Launcher • In a period of only three decades the breakdown of the Black Sea’s ecosystem reached crisis proportions. Problems included uncontrolled sewage pollution, irrational exploitation of fish stocks, and the accidental introduction of a jellyfishlike species whose total mass reached 900 million tons—ten times the annual fish harvest of the entire world! 72 Click the mouse button or press the Space Bar to display the information.

Lecture Launcher (cont. ) • In 1992, eleven nations that were part of the Lecture Launcher (cont. ) • In 1992, eleven nations that were part of the former Soviet Union joined a cooperative and began to take the urgent steps needed to restore the Black Sea as a natural resource. • Why does rapid industrialization often lead to the wasteful use of scarce resources? 73 Click the mouse button or press the Space Bar to display the information.

Problems of Rapid Industrialization • Unwise investments • People need time to adapt to Problems of Rapid Industrialization • Unwise investments • People need time to adapt to new patterns of living and working. • Countries need to use technology that is best suited for its culture. • The economy itself needs time to adapt to the change, build savings, and increase the number of educated and skilled workers. 74 Click the mouse button or press the Space Bar to display the information.

Discussion Question Why do you think people need time to adapt to industrialization? Explain? Discussion Question Why do you think people need time to adapt to industrialization? Explain? People’s entire lifestyles change when their work becomes specialized and nonagricultural. Before, their lives centered on providing for basic needs. Now they will make money to provide for those needs. 75 Click the mouse button or press the Space Bar to display the answer.

Economic Development • There are many factors that influence economic development. • Trade with Economic Development • There are many factors that influence economic development. • Trade with the outside world. • A government structure that provides for economic incentives, such as reasonable tax rates and private property rights. • Natural resources. 76 Click the mouse button or press the Space Bar to display the information.

Economic Development (cont. ) • Lack of one of these factors does not necessarily Economic Development (cont. ) • Lack of one of these factors does not necessarily mean the country has fallen into the vicious cycle of poverty. • Economic development can also depend on entrepreneurship and private property rights. 77 Click the mouse button or press the Space Bar to display the information.

Discussion Question Why is international trade so critical to economic development? International trade will Discussion Question Why is international trade so critical to economic development? International trade will bring in new sources of revenue for the developing nation. It also brings in new raw materials and provides greater incentives for national businesses to grow. 78 Click the mouse button or press the Space Bar to display the answer.

Information Leads to Cooperation • Media and the Internet transport information to developing nations. Information Leads to Cooperation • Media and the Internet transport information to developing nations. • Developing nations can then see the benefits of working together. • Alone, one developing nation has little power or impact in the world market, but as a group they can have influence. • Developing nations now partner with developed nations. 79 Click the mouse button or press the Space Bar to display the information.

Discussion Question What difficulties might arise when developing nations try to form economic agreements? Discussion Question What difficulties might arise when developing nations try to form economic agreements? Possible responses: The developing nations may have competing interests. They may not have much to offer each other in the way of resources. 80 Click the mouse button or press the Space Bar to display the answer.

Information Leads to Cooperation (cont. ) • Since 1981, leaders of both developing and Information Leads to Cooperation (cont. ) • Since 1981, leaders of both developing and developed nations have met many times. • A major purpose of these meetings is to establish global negotiations aimed at a more equal distribution of the world’s wealth and resources. • Some suggestions to achieve this goal have included low tariffs for developing nations and an “income tax” on developed nations to pay for international assistance programs. 81 Click the mouse button or press the Space Bar to display the information.

Section Assessment Graphic Organizer Create a diagram like the on page 537 of your Section Assessment Graphic Organizer Create a diagram like the on page 537 of your textbook to describe the four problems of rapid industrialization in developing nations. The following labels should be attached to the ends of the arrows in your diagram: Unwise investments; Failure to adapt to change; Using inappropriate technology; and Rushing through the stages of development. 82 Click the mouse button or press the Space Bar to display the answer.

Section Assessment (cont. ) In addition to poverty, what factors influence economic development? Supportive Section Assessment (cont. ) In addition to poverty, what factors influence economic development? Supportive political structure, appropriate incentive structure, and trade with the outside world also influence economic development. 83 Click the mouse button or press the Space Bar to display the answer.

Section Assessment (cont. ) What is the relationship between the increased flow of information Section Assessment (cont. ) What is the relationship between the increased flow of information and international economic cooperation? Increased flow of information encourages developing nations to work together to achieve economic power. 84 Click the mouse button or press the Space Bar to display the answer.

Section Assessment (cont. ) Understanding Cause and Effect How do you think the economic Section Assessment (cont. ) Understanding Cause and Effect How do you think the economic growth and development of developing countries will affect you in the future? Answers will vary. Make sure that students give reasons for their answers. 85 Click the mouse button or press the Space Bar to display the answer.

Section Close Make predictions on the future of developing nations in the twentyfirst century. Section Close Make predictions on the future of developing nations in the twentyfirst century. Discuss your predictions and explain what they are based on. 86

87 Click the mouse button to return to the Contents slide. 87 Click the mouse button to return to the Contents slide.

Section 1: Characteristics of Developing Nations • Developing nations are those with less industrial Section 1: Characteristics of Developing Nations • Developing nations are those with less industrial development and a relatively low standard of living. • Five characteristics of developing nations include a low GDP, an economy based on subsistence agriculture, poor health conditions (including a high infant mortality rate), a low literacy rate, and rapid population growth. • Many developing nations have governments that do not support private property rights. 88 Click the mouse button or press the Space Bar to display the information.

Section 2: The Process of Economic Development • The three stages of economic development Section 2: The Process of Economic Development • The three stages of economic development are the agricultural stage, the manufacturing stage, and the service sector stage. • A basic problem for developing nations is how to finance the equipment and training necessary to improve their standard of living. • Developing nations receive financing through foreign investment and foreign aid. Foreign aid can be given in the form of economic assistance, technical assistance, and/or military assistance. 89 Click the mouse button or press the Space Bar to display the information.

Section 2: The Process of Economic Development (cont. ) • International agencies, including the Section 2: The Process of Economic Development (cont. ) • International agencies, including the World Bank and the International Monetary Fund, channel funds to developing nations. • Developed countries provide foreign aid for humanitarian, economic, political, and military reasons. 90 Click the mouse button or press the Space Bar to display the information.

Section 3: Obstacles to Growth in Developing Nations • Four obstacles hamper economic growth Section 3: Obstacles to Growth in Developing Nations • Four obstacles hamper economic growth in developing nations: traditional attitudes and beliefs, continued rapid population growth, a misuse of resources (including capital flight), and trade restrictions. • The economic failure of Indonesia highlights some of the problems associated with rapid economic growth–lack of a national identity, massive government corruption and bureaucracies, reliance on a single product, and government interference in trade. 91 Click the mouse button or press the Space Bar to display the information.

Section 4: Industrialization and the Future • There are four problems of rapid industrialization: Section 4: Industrialization and the Future • There are four problems of rapid industrialization: unwise investments, not enough time to adapt to new patterns of living and working, use of inappropriate technology, and inadequate time to move through the stages of development. • Factors that spur economic growth include trade with the outside world, an appropriate incentive structure, a supportive political structure, natural resources, and reduced population growth. 92 Click the mouse button or press the Space Bar to display the information.

Section 4: Industrialization and the Future (cont. ) • Developing countries can get out Section 4: Industrialization and the Future (cont. ) • Developing countries can get out of the vicious cycle of poverty if their political system rewards entrepreneurs and promotes private property rights. 93

94 Click the mouse button to return to the Contents slide. 94 Click the mouse button to return to the Contents slide.

Recalling Facts and Ideas The per capita income in countries such as the United Recalling Facts and Ideas The per capita income in countries such as the United States, Japan, and Germany is approximately how many thousands of dollars? It is between $12, 000 and $29, 000. 95 Click the mouse button or press the Space Bar to display the answer.

Recalling Facts and Ideas (cont. ) What characteristics identify most developing nations? They are Recalling Facts and Ideas (cont. ) What characteristics identify most developing nations? They are identified by low per capita GDP, an agricultural economy, poor health conditions, a low literacy rate, and rapid population growth. 96 Click the mouse button or press the Space Bar to display the answer.

Recalling Facts and Ideas (cont. ) List two affiliates of the World Bank. The Recalling Facts and Ideas (cont. ) List two affiliates of the World Bank. The two affiliates are the International Development Association (IDA), and the International Finance Corporation (IFC). 97 Click the mouse button or press the Space Bar to display the answer.

Recalling Facts and Ideas (cont. ) What is the difference between military assistance and Recalling Facts and Ideas (cont. ) What is the difference between military assistance and technical assistance? Military assistance involves providing technical or economic assistance to a nation’s armed forces. Technical assistance involves providing professionals, such as engineers, teachers, and technicians, to teach skills to people in developing nations. 98 Click the mouse button or press the Space Bar to display the answer.

Recalling Facts and Ideas (cont. ) In what stage of development are most developing Recalling Facts and Ideas (cont. ) In what stage of development are most developing nations? Most developing nations are in the agricultural stage. 99 Click the mouse button or press the Space Bar to display the answer.

Recalling Facts and Ideas (cont. ) What are some reasons for giving foreign aid? Recalling Facts and Ideas (cont. ) What are some reasons for giving foreign aid? humanitarian reasons, economic reasons, political reasons, and national security reasons 100 Click the mouse button or press the Space Bar to display the answer.

Recalling Facts and Ideas (cont. ) How is rapid population growth an obstacle to Recalling Facts and Ideas (cont. ) How is rapid population growth an obstacle to economic development? It reduces the rate of growth per capita GDP. 101 Click the mouse button or press the Space Bar to display the answer.

Recalling Facts and Ideas (cont. ) How do international trade restrictions hinder economic growth Recalling Facts and Ideas (cont. ) How do international trade restrictions hinder economic growth in developing nations? They may prevent the purchase of cheaper foreign substitutes for inefficiently produced domestic products of lower quality. 102 Click the mouse button or press the Space Bar to display the answer.

Recalling Facts and Ideas (cont. ) Why are property rights a factor in economic Recalling Facts and Ideas (cont. ) Why are property rights a factor in economic development? The more certain property rights are guaranteed, the more investment there will be. 103 Click the mouse button or press the Space Bar to display the answer.

Recalling Facts and Ideas (cont. ) How can a developing nation’s government influence foreign Recalling Facts and Ideas (cont. ) How can a developing nation’s government influence foreign investment? They can influence foreign investment by limiting its role in the economy, by limiting tax rates and ensuring private property rights, and by encouraging foreign trade. 104 Click the mouse button or press the Space Bar to display the answer.

Thinking Critically Making Inferences Is an abundance of natural resources required in order for Thinking Critically Making Inferences Is an abundance of natural resources required in order for a country to have economic growth and development? Explain. Not necessarily, because other factors such as a nation’s international trade, its infrastructure, and its political structure all contribute to economic growth and development. 105 Click the mouse button or press the Space Bar to display the answer.

Thinking Critically (cont. ) Determining Cause and Effect Create a diagram like the on Thinking Critically (cont. ) Determining Cause and Effect Create a diagram like the on page 541 of your textbook to explain the relationship between well-defined and government-enforced private property rights and the incentive structure for investment in a nation. Answers will vary. 106 Click the mouse button or press the Space Bar to display the answer.

Reviewing Skills • Taking a Test Write 10 questions that could be used on Reviewing Skills • Taking a Test Write 10 questions that could be used on a test for this chapter. • Write 3 multiple-choice questions, 3 true/false questions, 3 matching questions, and 1 short answer question. • Include short directions for each type of question. • Exchange your test with another student. • After taking each other’s test, analyze the questioning strategies used. • Were wrong choices obvious? • Which type of questions was the most difficult to answer? Why? 107 Click the mouse button or press the Space Bar to display the information.

How does rapid population growth contribute to other problems for developing nations? It can How does rapid population growth contribute to other problems for developing nations? It can contribute to food shortages and the lack of adequate housing. 108 Click the mouse button or press the Space Bar to display the answer.

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Many developed nations provide aid to promote economic development in poorer nations. Work in Many developed nations provide aid to promote economic development in poorer nations. Work in groups to draw up the criteria you think foreign nations should meet to receive aid from the United States. Identify the kind of aid that you think the United States should provide–money, equipment, education and training, and so on. Choose a representative to present and discuss your findings with the class. 119 Click the mouse button to return to the Contents slide.

Explore online information about the topics introduced in this chapter. Click on the Connect Explore online information about the topics introduced in this chapter. Click on the Connect button to launch your browser and go to the Economics: Today and Tomorrow Web site. At this site, you will find interactive activities, current events information, and Web sites correlated with the chapters and units in the textbook. When you finish exploring, exit the browser program to return to this presentation. If you experience difficulty connecting to the Web site, manually launch your Web browser and go to http: //glencoe. com/sec/socialstudies/economics/econtoday 2005/ index. php/ 120

Explore online information about the topics introduced in this chapter. Click on the Connect Explore online information about the topics introduced in this chapter. Click on the Connect button to launch your browser and go to the Business. Week Web site. At this site, you will find up-to-date information dealing with all aspects of economics. When you finish exploring, exit the browser program to return to this presentation. If you experience difficulty connecting to the Web site, manually launch your Web browser and go to http: //www. businessweek. com 121

Indonesia–A Pariah State? A new government, led by President Abdurrahman Wahid, undertook political and Indonesia–A Pariah State? A new government, led by President Abdurrahman Wahid, undertook political and economic reforms shortly after elections late in 1999. He was impeached in 2001 and replaced by Megawati Sukarnoputir, the daughter of Indonesia’s first president, Sukarno. Read the Business. Week Spotlight on the Economy article on page 533 of your textbook to learn about the effects of Indonesia’s struggles on its international reputation. Continued on next slide. 122 This feature is found on page 533 of your textbook.

Indonesia–A Pariah State? What economic actions resulted from Indonesia’s massacre of East Timor citizens? Indonesia–A Pariah State? What economic actions resulted from Indonesia’s massacre of East Timor citizens? The International Monetary Fund (IMF) considered cutting off new loans to Indonesia. Standard & Poor’s downgraded Indonesia’s currency rating. Ethnic Chinese business leaders pulled out their investments in Indonesia. Continued on next slide. 123 Click the mouse button or press the Space Bar to display the answer. This feature is found on page 533 of your textbook.

Indonesia–A Pariah State? Why is it significant that capital is being removed from Indonesia? Indonesia–A Pariah State? Why is it significant that capital is being removed from Indonesia? Without capital investment, Indonesia will not be able to sustain healthy economic growth. 124 Click the mouse button or press the Space Bar to display the answer. This feature is found on page 533 of your textbook.

Economics and You Video 26: Developing Countries After viewing Developing Countries, you should be Economics and You Video 26: Developing Countries After viewing Developing Countries, you should be able to. . . • describe the general characteristics of developing countries’ economies. • explain how and why developing countries borrow money from other countries and from international organizations. • describe some of the strategies that developing countries can use to strengthen their economies. Continued on next slide. 125 Click the mouse button or press the Space Bar to display the information.

Economics and You Video 26: Developing Countries Disc 1, Side 2 Chapter 26 Click Economics and You Video 26: Developing Countries Disc 1, Side 2 Chapter 26 Click the Videodisc button anytime throughout this section to play the complete video if you have a videodisc player attached to your computer. Click the Forward button to view the discussion questions and other related slides. Click inside this box to play the preview. Continued on next slide. 126

Economics and You Video 26: Developing Countries Why are manufacturers interested in developing nations? Economics and You Video 26: Developing Countries Why are manufacturers interested in developing nations? Developing nations have lower labor costs. As nations develop, the citizens will spend more money on items. Disc 1, Side 2 Chapter 26 127 Click the mouse button or press the Space Bar to display the answer.

Taking a Test Learning how to take a test is an important skill. Whether Taking a Test Learning how to take a test is an important skill. Whether you are in school or looking for a job, you will be asked to take many tests during your life. Continued on next slide. 128 This feature is found on page 538 of your textbook.

Taking a Test Learning the Skill When your teacher announces that you will be Taking a Test Learning the Skill When your teacher announces that you will be tested soon, follow these guidelines for taking a test: – Start studying several days before the test. In particular, review your notes and become familiar with new vocabulary terms. – Read the directions and the questions carefully. – Pace yourself so that you leave enough time to answer all of the questions. Continued on next slide. 129 Click the mouse button or press the Space Bar to display the information. This feature is found on page 538 of your textbook.

Taking a Test Learning the Skill (cont. ) – Skip the more difficult questions, Taking a Test Learning the Skill (cont. ) – Skip the more difficult questions, then come back to them after you’ve answered the other questions. – Do not leave any answer blank. A good guess may be the correct answer. – Some essay questions start with the words discuss, describe, or explain. This means that you must give full answers, usually written in complete sentences. Continued on next slide. 130 Click the mouse button or press the Space Bar to display the information. This feature is found on page 538 of your textbook.

Taking a Test Practicing the Skill • Answer the questions that appear on the Taking a Test Practicing the Skill • Answer the questions that appear on the following slides. Continued on next slide. This feature is found on page 538 of your textbook. 131

Taking a Test The most important rule in taking a test is to a. Taking a Test The most important rule in taking a test is to a. read the directions and the questions carefully; b. work as fast as you can; c. answer all the questions. Continued on next slide. 132 Click the mouse button or press the Space Bar to display the answer. This feature is found on page 538 of your textbook.

Taking a Test Which of the following may be caused by the other three? Taking a Test Which of the following may be caused by the other three? a. failure on a test; b. not enough studying; c. going to bed late the night before a test; d. taking poor notes in class. Continued on next slide. 133 Click the mouse button or press the Space Bar to display the answer. This feature is found on page 538 of your textbook.

Taking a Test True or False? A true or false question is false if Taking a Test True or False? A true or false question is false if any part of it is false. This statement is true. 134 Click the mouse button or press the Space Bar to display the answer. This feature is found on page 538 of your textbook.

How Much Do Industrial Countries Give? The United Nations has asked industrial countries to How Much Do Industrial Countries Give? The United Nations has asked industrial countries to give 0. 7 percent of GDP in official development assistance. Only Denmark, Luxembourg, the Netherlands, Norway, and Sweden have reached the goal, however. Of the countries that provide foreign aid through the Organization for Economic Cooperation and Development (OECD), the average country gave just 0. 39 percent of GNP in 2000. The Untied States provided 0. 11 percent of GNP, the lowest percentage of any donor nations. In dollar terms, however, the United States provided more foreign aid than any other country in the world except Japan. 135

Demographers often use a measure called doubling time to make population projections. Doubling time Demographers often use a measure called doubling time to make population projections. Doubling time is the number of years it will take for a population to double at present growth rates. To figure out how long it will take a population to double in size, divide the number 70 by its annual growth. (The number 70 comes from the natural log of 2, which is. 70. ) Given the world’s current annual growth rate of about 1. 3 percent, the population will double in 54 years. 136

Nineteenth-century essayist and historian Thomas Carlyle found Malthus’s Essay on the Principle of Population Nineteenth-century essayist and historian Thomas Carlyle found Malthus’s Essay on the Principle of Population so depressing that he labeled economics “the dismal science. ” 137

Thomas Malthus 1766– 1834 Click the picture to listen to the selection on page Thomas Malthus 1766– 1834 Click the picture to listen to the selection on page 522 of your textbook to find out more about Thomas Malthus. Be prepared to answer questions that appear on the next two slides. 138 This feature is found on page 522 of your textbook.

Thomas Malthus 1766– 1834 What is Malthus’s principle, stated simply? World population is growing Thomas Malthus 1766– 1834 What is Malthus’s principle, stated simply? World population is growing faster than food production. 139 Click the mouse button or press the Space Bar to display the answer. This feature is found on page 522 of your textbook.

Thomas Malthus 1766– 1834 According to Malthus, why can there be no happy, worry-free Thomas Malthus 1766– 1834 According to Malthus, why can there be no happy, worry-free society? The inequality in population growth and food production, since it is a law of nature, cannot be overcome. 140 Click the mouse button or press the Space Bar to display the answer. This feature is found on page 522 of your textbook.

End of Custom Shows WARNING! Do Not Remove This slide is intentionally blank and End of Custom Shows WARNING! Do Not Remove This slide is intentionally blank and is set to auto-advance to end custom shows and return to the main presentation. 141

142 Click the mouse button to return to the Contents slide. 142 Click the mouse button to return to the Contents slide.