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Economics Theme 2 - MACRO > 2.1 Measures of economic performance > Flashcards

2.1 Measures of economic performance Flashcards

1
Q

What is Gross Domestic Product?

A

GDP- The total value of goods and services produced in a country within a year

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2
Q

What is real GDP?

A

Real GDP strips out the effects of inflation

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3
Q

What is nominal GDP?

A

GDP with the effects of inflation

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4
Q

What is economic growth?

A

The rate of change of output - increase in the long term productive potential of a country

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5
Q

What is GNI?

A

Gross National Income - The value of goods and services produced by a country over a period of time plus net overseas interest payments and dividends

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6
Q

What is GNP?

A

Gross national product - the value of goods and services over a period of time through labour and property supplied by citizens of a country both domestically and overseas

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7
Q

What are purchasing power parities?

A

An exchange rate of one currency for another and compares how much a typical basket of goods costs in one country compared to another

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8
Q

Problems of using GDP to compare standards of living

A

Inefficient at collecting or calculating data
The hidden market - people don’t declare their taxes so some incomes aren’t taken into account

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9
Q

Other problems of using GDP to compare standards of living

A

Inequalities
Quality of good and services
Spending

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10
Q

What is national happiness?

A

Societal and personal well-being beyond what an economy produces

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11
Q

What is inflation?

A

The general increase of prices in the economy

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12
Q

What is defaltion?

A

The fall of prices

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13
Q

What is disinflation?

A

A reduction in the rate of inflation

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14
Q

3 causes of inflation

A

Demand pull
Cost push
Growth of money supply

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15
Q

What is demand pull inflation?

A

An increase in AD causes inflation to rise as a shift causes a change in price

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16
Q

What is cost push inflation?

A

A decrease in AS may push prices up

17
Q

What is growth of money supply inflation?

A

Too much money in the economy, if people have access to money they are going to spend it so if there is no change in supply then prices will have to rise

18
Q

Effects of inflation on consumers

A

Less to spend which may mean a fall in living standards
Psychological effects as consumers may think they have less to spend

19
Q

Effects of inflation on firms

A

British goods may becomes more expensive making them less competitive
Makes it hard to plan for the future

20
Q

Effects of inflation on workers

A

If workers do not receive yearly pay rises of the rate of inflation, they will be worse off and their living standards will decrease.

21
Q

Measures of unemployment

A

Claimant count: the number of people receiving benefits
International Labour Organisation survey

22
Q

What is the employment rate?

A

The percentage of the population of working age who are employed

23
Q

What are the 5 types of unemployment?

A

Frictional
Structural
Seasonal
Cyclical
Real wage

24
Q

What is structural unemployment?

A

When a worker has a lack of skills and stops them from being employed

25
Q

What is frictional umemployment?

A

When a employee is in between jobs

26
Q

What is seasonal unemployment?

A

Due to seasons in industries like tourism, people are forced out of their jobs

27
Q

What is cyclical unemployment?

A

Unemployment due to a lack of demand of goods and services within a country
Follows the trade cycle

28
Q

What is real wage unemployment?

A

When wages are set above the equilibrium level resulting in an excess supply of labour or unemployment

29
Q

Impacts of unemployment on governments

A

Fall in tax revenue and higher spending on welfare payments
Budget deficit

30
Q

Unemployment impacts of society as a whole

A

Social deprivation - leading to crime and social dislocation

31
Q

What is the balance of payments?

A

A record of all financial dealing over a period of time between economic agents of one country and all other countries

32
Q

What are the components of the balance of payments?

A

Current account
Capital account
Financial account

33
Q

What are the components of the current account?

A

Balance of trade in goods
Balance of trade in services
Net income from abroad
Net current transfers

34
Q

When is there a current account surplus?

A

Where exports are greater than imports so the current balance is positive

35
Q

When is there a current account deficit?

A

Where imports are greater than exports so the balance is negative

Economics Theme 2 - MACRO (6 decks)

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