1. measures of economic performance

Question 1

GDP

Answer 1

the standard measure of output, which allows us to compare countries. it is the total value of goods and services produced by a country in a year

Question 2

rates of GDP as a measure of growth

Answer 2

economic growth is the rate if change of output. typically measured by the percentage change in GDP per year

Question 3

GDP per capita

Answer 3

total GDP divided by the population

Question 4

real GDP

Answer 4

takes away affect of inflation

Question 6

gross national income (GNI)

Answer 6

the values of goods and services produced by a country over time plus the net overseas interest payments and dividends

Question 7

gross national product (GNP)

Answer 7

the value of goods and services over a period of time through labour or property produced by citizens

Question 8

making comparisons about growth

Answer 8

-overtime: changing national income levels will show us if the country is growing or shrinking
-between countries: if countries have different populations, GDP per capita must be measured

Question 9

Purchasing Power Parities

Answer 9

an exchange rate of one currency for another which compares how much a typical basket of goods in the country compares to another

Question 10

problems of using GDP to compare standard of living

Answer 10

-inaccuracy if data (black markets, inflation, home produced goods)
-inequality (what if only one group grow and overall living standard are unchanged)
-quality of goods and services (living standards could be better than expected)
-comparing different currencies (ensure purchasing power parity is used)
-spending

Question 11

factors of national happiness

Answer 11

-real GDP per capita
-health
-life expectancy
-freedom from corruption
-having someone to count on
-perceived freedom to make choices
-generosity

Question 12

real incomes and subjective happiness

Answer 12

at low incomes, happiness and income are positively related. however at some point in higher incomes, income affects happiness less

Question 13

inflation

Answer 13

the general increase in prices in the economy

Question 14

deflation

Answer 14

the fall in prices which indicates a slowdown in the economy

Question 15

disinflation

Answer 15

reduction in the rate of inflation

Question 16

consumer price index

Answer 16

collection of prices of 710 goods and services from 20,000 shops in 141 locations and online sites. the prices are updates every month

Question 17

how does the CPI measure inflation

Answer 17

all the prices pf the basket of goods are combines using information of the average household spending pattern to produce an overall index

Question 18

limitations of CPI

Answer 18

-not all goods are measured so not totally representative
-does not include the price of housing

Question 19

Retail Price Index

Answer 19

like the CPI but includes housing prices

Question 20

causes of inflation

Answer 20

cost push
demand pull
increase in money supply

Question 21

effects of inflation on consumers

Answer 21

-less money to spend
-those in debt find it easier to pay off
-people will feel less well off

Question 22

effects of inflation on workers

Answer 22

-if incomes don’t rise, their welfare will fall
-deflation could lead to a loss of jobs

Question 23

effects of inflation on firms

Answer 23

-less competitive to other nations if your goods are more expensive

Question 24

measures of unemployment

Answer 24

-claimant count
-International labour organisation
-labour force survey

Question 25

claimant count

Answer 25

number of people receiving benefits

Question 26

labour force survey

Answer 26

sample of people living in households

Question 27

international labour organisation

Answer 27

anyone over 16 can be classed as unemployed, employed or economically inactive

Question 28

comparisons between the claimant count and LFS

Answer 28

-some people aren’t eligible for benefits but are unemployed so the LFS tends to be higher
-some people may fraudulently claim benefits
-both underestimate the figure (don’t include sick or disabled people, those on government training schemes or those working part time wanting to work full time)

Question 29

employment rate

Answer 29

percentage of population of working age who are employed

Question 30

unemployment rate

Answer 30

percentage if economically active people who are unemployed

Question 31

underemployed people

Answer 31

-zerohour contracts or part timers
-those in ops that do not reflect their skill level
-increases during recessions

Question 32

types of unemployment

Answer 32

-frictional (between jobs )
-structural (lack of demand)
-seasonal
-cyclical (lack of demand in country)

Question 33

migration and skills

Answer 33

migration cause a rise in jobs as their spending should increase job demand, however they could also cause wages to fall

Question 34

impacts of unemployment on the government

Answer 34

-fall in tax revenue
-budget deficit

Question 35

impacts of unemployment on consumers

Answer 35

-less choice
-possibly lower prices

Question 36

impacts of unemployment on workers

Answer 36

-low job security
-those who are unemployed see a loss of income

Question 37

impacts of unemployment on firms

Answer 37

-can offer lower wages
-smaller pool of skilled people
-fall in demand so fall in profit