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Economics > 2.1 Measures Of Economic Performance > Flashcards

2.1 Measures Of Economic Performance Flashcards

1
Q

What are the 4 indicators of economic performance?

A
  • Economic growth
  • Unemployment
  • Inflation
  • Current account
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2
Q

What does economic growth refer to?

A
  • The rate of change in GDP between terms
  • GDP is ‘gross domestic product’ and is a measure of the total goods and services produced in a country
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3
Q

What does unemployment refer to?

A
  • Number of people who are actively looking for a job but are currently without one
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4
Q

What does inflation refer to?

A
  • A sustained increase in general price level
  • Leads to a fall in the purchasing power of a currency
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5
Q

What does current account refer to?

A
  • Difference in the value of the total exports (X)- total imports (M)
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6
Q

What is GDP?

A
  • Gross Domestic Product
  • Measures total value of national output of goods and services produced in a given time period
  • Within geographical boundaries of country
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7
Q

What are the three main types of GDP calculations?

A
  • Expenditure
  • Incomes
  • Output value
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8
Q

What factors make up expenditure in GDP?

A
  • Consumption (C)
  • Government spending (G)
  • Investment spending (I)
  • Changes in value of stocks
  • Exports (X)
  • (negative) Imports (M)
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9
Q

What factors make up income in GDP?

A
  • Wages & Salaries
  • Profits of businesses
  • Rental income from land ownership
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10
Q

What factors make up output value in GDP?

A
  • These are the value added from each of the main sectors including:
  • Primary (extraction)
  • Secondary (manufacturing)
  • Tertiary (services)
  • Quaternary (research)
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11
Q

What is value GDP vs volume GDP?

A
  • Value GDP is monetary value of goods and services
  • Volume GDP is the physical quantity of goods and services
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12
Q

What is nominal GDP?

A
  • Money data is not adjusted for inflation
  • GDP is expressed at the current price of money
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13
Q

What is real GDP?

A

GDP is adjusted for inflation, making it easier to compare to other years
- Prices are held at chosen base year
- =nominal value/price index X 100
- Price index = 100 + inflation

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14
Q

What is GDP per capita?

A
  • Total GDP/population
  • Used to find economic output per person in a country
  • Useful for finding out average income level per person in a country
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15
Q

What are some limitations to GDP?

A
  • Ignores distribution of wealth
  • Doesn’t consider changes in working conditions
  • Doesn’t include voluntary work
    -Doesn’t measure well-being
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16
Q

What is economic well-being?

A
  • Quality of life and satisfaction
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17
Q

What is economic growth?

A
  • Sustained growth of real GDP over time
  • Increases productivity in the long-run
18
Q

What is economic welfare?

A
  • Measure of social & economic well-being
  • Many aspects of this are not material
19
Q

How might well-being of a country be measured?

A
  • Median household income
  • Percentage living below a poverty line
  • Life expectancy
  • Literacy rates
20
Q

What is subjective happiness?

A
  • Self-reported levels of happiness, determined through questionnaires
  • May be affected by genetics, income, health and social influences
21
Q

What is the Easterlin Paradox?

A
  • The idea that as average income rises, so does happiness, until a point
  • After this point, other factors and changes leads to happiness not further increasing
22
Q

What is the happy planet index?

A
  • An index that measures a country’s: life expectancy, well-being, inequality outcomes and ecological footprint to determine the countries that have the longest, most happy and most sustainable lives
23
Q

What is GNI?

A
  • Calculates income of all residents
  • = GDP + net primary income + net secondary income
  • NPI is wages, salaries and income form a country’s resident abroad and foreign investments
  • NSI is transfer of money between families in different countries as well as international aid
24
Q

What is PPP?

A
  • Purchasing Power Parity is the idea that items should cost the same in different countries, based on the current exchange rate
  • It measures how many units of one country’s currency is required to buy the same basket of goods as in another country
25
Q

What is a PPP-adjusted international comparison?

A
  • A global ranking for countries to show how much it costs for each of them to purchase the same goods
26
Q

What is national income?

A
  • Total level of output in an economy
  • Is equal to national expenditure = national output
27
Q

What are the 4 factors of production?

A
  • Land
  • Labour
  • Capital
  • Enterprise
28
Q

What do firms provide to households?

A
  • Goods and services
29
Q

What do households provide to firms?

A
  • Economic factors of production
30
Q

What do firms gain from households?

A
  • Expenditure money from consumption of goods and services
31
Q

What do households gain from firms?

A
  • Money in the form of wages and salaries
32
Q

What are some injections into the circular flow model?

A
  • Investment
  • Government spending
  • Exports
33
Q

What are some leakages (withdrawals) from the circular flow model?

A
  • Savings
  • Taxes
  • Imports
34
Q

What does the ‘land’ factor gain?

A

Rent

35
Q

What does the ‘capital’ factor gain?

A

Interest

36
Q

What does the ‘labour’ factor gain?

A

Wages

37
Q

What does the ‘enterprise’ factor gain?

A

Profits

38
Q

What is a closed /open economy?

A
  • An economy with/without interaction with foreign agents and economies
39
Q

What happens if injections>leakages?

A
  • Economic growth occurs
40
Q

Unless told otherwise, what can we assume of injections and leakages?

A
  • Total injections = total leakages

Economics (14 decks)

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