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Economic Development

Measurement: Human development index, More indirect indicators such as access to health and education

  • 3 things to know
  • A2 Units 3 and 4

Overview

Recall questions on The human development index, The economic structure of an economy, More indirect indicators such as access to health and education.

What you need to know

Answer each one before you reveal it.

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Key term

Why does converting incomes at market exchange rates usually understate living standards in poorer countries?

Key term

State the three dimensions of the Human Development Index and the indicator used for each.

Key term

Name three indirect indicators of development based on access to health and education.

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    Why does converting incomes at market exchange rates usually understate living standards in poorer countries?

    Model answer

    Market rates are driven by traded goods and capital flows, but non-traded goods and services such as housing, food and local labour are far cheaper in poorer countries, so a given income buys much more there than the conversion suggests.

  2. 2

    What is the Human Development Index and what range of values can it take?

    Model answer

    The Human Development Index is a composite measure of development published by the United Nations Development Programme, taking a value between 0 and 1, where a higher figure indicates a higher level of human development.

  3. 3

    State the three dimensions of the Human Development Index and the indicator used for each.

    Model answer

    A long and healthy life, measured by life expectancy at birth; knowledge, measured by mean years of schooling among adults and expected years of schooling for children; and a decent standard of living, measured by GNI per head at purchasing power parity.

  4. 4

    How are the three components combined to produce the HDI figure?

    Model answer

    Each dimension is first converted into an index scaled between 0 and 1 using fixed minimum and maximum values, and the three indices are then combined as a geometric mean.

  5. 5

    Why is the HDI regarded as a better guide to development than income alone?

    Model answer

    It captures health and education outcomes as well as income, so it reveals whether a country's material wealth is actually being converted into longer lives and better schooling for its people.

  6. 6

    Give four limitations of the Human Development Index.

    Model answer

    It ignores the distribution of income and outcomes within a country, it says nothing about political freedom, human rights or gender inequality, it measures the quantity of schooling rather than its quality, and it takes no account of environmental damage.

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