Activity 3 Distinguish between economic growth and economic development. [8]
Answer to activity 3
Economic growth
Economic development
A process by which the productive capacity of the economy increases over time.
Leads to rising levels of national output and income.
Is an increase in real gross domestic product (GDP)
A process that concentrates on people’s standard of living, selfrespect and freedom of choice.
Growth should lead to development.
The ultimate aim of economic policy is an improved standard of living of the population per capita by means of economic growth and development. (any 2 × 2) × 2 [8]
Activity 4 Explain unequal standards of living as a characteristic of the North/South divide. [6]
Answer to activity 4
The real per capita income in developing countries is low compared to developed countries, e.g. 87% of the world’s total income is produced by 15% of the world’s population
Life expectancy in developing countries is as low as 47 years compared to a life expectancy of over 80 years in a country like Sweden
Low levels of education the adult literacy rate determines the effectiveness of education [6]