The changing economic world
What's covered
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Key facts
Economic change in the UK
The City of London — the "Square Mile" — is the UK's historic financial district and remains its main financial centre.
Economic development in an LIC or NEE
During rapid economic growth LICs typically experience declining birth and death rates as healthcare, education and employment improve.
Reducing the development gap
Debt relief is the cancellation of some or all of a poor country's foreign debt, freeing money for health, education and infrastructure.
Extended Response Practice
Tourism reduces the development gap by generating foreign income and creating jobs across service industries (transport, food, accommodation, guiding).
The development gap
Foreign aid does not always benefit recipients equally — outcomes depend on governance, corruption, conditions attached, and whether aid is tied to donor goods/services.
Economic change in the UK
Rural areas near major UK cities have benefited economically from commuter spending and counter-urbanisation.
Economic development in an LIC or NEE
Lagos is Nigeria's largest city and a major commercial hub for West Africa.
Reducing the development gap
Investing in education is a long-term reduction strategy because skilled workers raise productivity for generations.
The development gap
Birth rate is the number of live births per 1,000 people in a population per year.
Economic change in the UK
Enterprise zones offer tax incentives, business-rate relief and simplified planning rules to attract businesses to economically declining areas.
Sample questions
A taste of the 62 questions in this topic, answers marked. Sign up to practise the full set with spaced repetition.
What is the quaternary sector of the economy?
- •extracting raw materials such as farming, mining, and fishing
- ✓high-tech research, information, and knowledge-based industries
- •processing raw materials into manufactured goods
- •providing services such as retail, banking, and transport
What is the difference between short-term and long-term aid?
- •Short-term aids food only; long-term aids only schools
- ✓Short-term covers emergencies; long-term builds development
- •Short-term is given by NGOs; long-term by governments
- •Short-term is in cash; long-term is always in kind
Which of these is a strategy for reducing the development gap?
- •Encouraging emigration of skilled workers to high-income countries
- ✓Investment from transnational corporations and microfinance loans
- •Reducing investment in education to balance government budgets
- •Restricting access to international trade and overseas markets
What does HDI stand for?
- •Health and Development Index
- •Human Demographics Index
- •Human Deprivation Indicator
- ✓Human Development Index
What is a science park?
- ✓A business area near a university offering research links and skilled graduates
- •A dedicated outdoor space for scientific education attached to a secondary school
- •A government-funded park where scientific research is carried out by public employees
- •An industrial estate offering reduced business rates to attract technology companies
Why do many economists argue trade is more sustainable than aid for LIC development?
- •Aid is taxed by recipient governments and trade isn't
- •Trade always returns higher profit per pound than aid
- ✓Trade builds independent income; aid creates dependency
- •Trade requires no government regulation at any stage
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