2.1 Measures Of Economicc Performance

Question 1

Economic growth

Answer 1

Rate of change of output of an economy
Increase in the long term productive capacity of an economy
Measured by percentage change in real GDP per annum or outward shift in PPF
2% ideal

Question 2

GDP- Gross Domestic Product

Answer 2

Total value of goods and services produced in a country in a year (within the geographical boundary)
Standard measure of output

Question 3

Total GDP

Answer 3

Overall GDP for a country

Question 4

GDP per capita

Answer 4

Total GDP divided by population
Grows if national output grows faster than the population over a period of time

Question 5

Real values

Answer 5

Value of national income
Figures adjusted for inflation
E.g. size of basket of goods

Question 6

Nominal values

Answer 6

Volume of national income
Figures unadjusted for inflation
E.g. monetary cost of basket of goods

Question 7

Value

Answer 7

Volume x current price level

Question 8

GNI (Gross National Income)

Answer 8

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

Question 9

GNP (Gross National Product)

Answer 9

The value of goods and services over a period of time through labour or property supplied by citizens of a country both domestically and overseas

Question 10

Purchasing Power Parity (PPP)

Answer 10

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

Question 11

Transfer payment

Answer 11

Money is exchanged/ transferred but there is no addition to output