Characteristics of A Developing/Underdeveloped Economy - SS3 Economics Past Questions and Answers - page 1
Which of the following is a characteristic of a developing or underdeveloped economy?
High GDP per capita
Low poverty rates
Dependence on tertiary industries
Limited access to capital
Which of the following is a consequence of limited access to capital in a developing economy?
High levels of human capital
Low levels of economic diversification
Political stability
High levels of infrastructure development
What is the primary sector of the economy in a developing economy?
Manufacturing
Agriculture
Information technology
Financial services
Which of the following is a characteristic of human capital?
Infrastructure development
Education and skills
Dependence on primary industries
Limited access to credit
What is the consequence of political instability in a developing economy?
High levels of economic growth
Limited access to capital
Dependence on tertiary industries
Low poverty rates
Explain why developing economies may have limited access to credit.
Developing economies may have limited access to credit due to weak financial systems, limited collateral, and a lack of credit history. Additionally, developing economies may face higher risk and uncertainty, which can lead to higher interest rates and further limit access to credit.
Describe one consequence of dependence on primary industries in a developing economy.
Dependence on primary industries in a developing economy can lead to vulnerability to fluctuations in commodity prices. This can limit economic diversification and create a reliance on a small number of industries, which can be a risk to long-term economic stability.