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ECONOMIC
DEVELOPMENT
Chapter 3
DETERMINANTS OF ECONOMIC
DEVELOPMENT
ECONOMIC DEVELOPMENT:
Not determined by economic factors
alone.
There are non-economic factors that
affect economic development and
have greater influence an economic
ones.
DETERMINANTS OF
ECONOMIC DEVELOPMENT
Economic Factors:
1. CAPITAL
Refers to finished goods which are
being used to produce other
goods. These are the machines,
buildings, tools, equipment, etc.
DETERMINANTS OF
ECONOMIC DEVELOPMENT
Economic Factors:
1. CAPITAL
Types of Capital:
a) Physical capital (materials)
b) Financial capital (money)
c) Human capital (people)
DETERMINANTS OF
ECONOMIC DEVELOPMENT
Economic Factors:
1. CAPITAL
Machines
• Accelerate the production and
distribution of goods.
• Work is done in lesser time
and effort.
DETERMINANTS OF
ECONOMIC DEVELOPMENT
Economic Factors:
1. CAPITAL
Machines
• Reduces unit cost.
• During ancient times people relied
on men and animals for production
and construction. For example,
temples and pyramids were built by
thousands of workers, mostly slaves.
DETERMINANTS OF
ECONOMIC DEVELOPMENT
Economic Factors:
1. CAPITAL
Machines
• There are still many parts of the
world which are using primitive
methods of production.
• Rich countries like USA, Japan, and
Western Europe have been using
modern machines.
DETERMINANTS OF ECONOMIC
DEVELOPMENT
Economic Factors:
9. GEOGRAPHY
In fact, the first civilizations
emerged in great river valleys –
Tigris, Euphrates, and the Nile.
DETERMINANTS OF ECONOMIC
DEVELOPMENT
Economic Factors:
9. GEOGRAPHY
Mountainous countries pose
obstacles to both transportation
and communication systems.
Philippines – has more than
7,000 islands which do not
provide a good network of
transportation and
communication.
DETERMINANTS OF ECONOMIC
DEVELOPMENT
Economic Factors:
9. GEOGRAPHY
Geographical disadvantage can be
eliminated or reduced through
proper use of technology and
capital.