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GEC 8 RE and WB

The document outlines various economic unions and classifications based on income levels, including low, lower-middle, upper-middle, and high-income economies, each with distinct characteristics. It also explains the concepts of absolute and comparative advantage in production. Additionally, it highlights the World Bank's annual income classification based on GNI per capita.

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Marcus Jacob Ladisla
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23 views13 pages

GEC 8 RE and WB

The document outlines various economic unions and classifications based on income levels, including low, lower-middle, upper-middle, and high-income economies, each with distinct characteristics. It also explains the concepts of absolute and comparative advantage in production. Additionally, it highlights the World Bank's annual income classification based on GNI per capita.

Uploaded by

Marcus Jacob Ladisla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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THE

GLOBAL
ECONOMY
Economic
Economic Union Harmonization of Domestic Policies (Tax
Union & Spending Policies)

Monetary
Monetary Union
Common Currency & Monetary
Union Policy

Common Allows free movements of


Common Market factors of production
Market
Customs Establish common external
Customs Union
Union barriers

Free Eliminating internal


barriers to trade
Trade
Free Trade Area
Area
WORLD BANK COUNTRY
CLASSIFICATION BY INCOME LEVEL

Updated annually on July 1 (Atlas Method)


Based on GNI per capita
INCOME GDP GNP GNI
EARNED BY:

RESIDENTS IN C+I+G+X C+I+G+X C+I+G+X


C – Personal Consumption COUNTRY
I – Business Investment Includes If Spent
FOREIGNERS IN Includes Excludes All in Country
G – Government Spending COUNTRY

X – Exports - Imports
RESIDENTS OUT Includes If
OF COUNTRY Excludes Includes All Remitted Back

FOREIGNERS
OUT OF Excludes Excludes Excludes
COUNTRY
GNI per Capita:
• Economic Growth 2024
• Inflation Group GNI per capita
Low Income <$1,145
• Exchange Rates Lower-Middle $1,146-4,515
• Population Growth Income
Upper-middle $4,516-14,005
Income
High Income >$14,005
LOW INCOME ECONOMIES

Characteristics:

Limited industrialization and a high


percentage of the population engaged
in agriculture and subsistence farming
High birth rates
Low literacy rates
Heavy reliance on foreign aid
Political instability and unrest
Concentration in Africa south of the
Sahara
LOWER-MIDDLE INCOME ECONOMIES

Characteristics:

early stages of industrialization


Factories supply a growing domestic
market
Consumer markets are expanding
Labor-extensive industries

“Less Developed Countries”


UPPER-MIDDLE INCOME ECONOMIES

Characteristics:

Agricultural sector to industrial sector


Degree of urbanization increases
Rising wages
High rates of literacy
Advanced education
Lower wage cost

“Industrializing or Developing
Countries”
HIGH INCOME ECONOMIES
Characteristic
:

Sustained
Economic
Growth

“Advanced,
Developed,
Industrialized
or Post-
industrial
Countries”
Comparative Advantage vs Absolute Advantage

Absolute Advantage Comparative Advantage

• Ability of country A to produce • Ability of country A to produce


goods at a lower cost per goods at a lower opportunity
unit, maximizing the available cost than country B
resources within the country • Country A produces goods
• Country A produces a higher better than country B with the
volume of goods with the given same amount of resources
amount of resources than • Considers all factors of
country B production during a specific
• Considers the greater quantity period
of the production of goods

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