2.1.1 Economic growth

Question 1

Big Mac Index

Answer 1

A way of measuring purchasing power parity (PPP) between different countries.

Compares the US dollar price of a Big Mac across countries to assess how under/overvalued the local currency is against the US dollar

Question 2

BRICS economies

Answer 2

Brazil
Russia
India
China
South Africa

the rise of emerging markets. have a bigger share of world trade than USA

Question 3

Constant prices

Answer 3

tell us that the data has been inflation adjusted

Question 4

Economic cycle

Answer 4

variations in the annual rate growth of GDP over time characterized by periods of growth (expansions), followed by periods of contraction (recessions).

Question 5

Economic development

Answer 5

Long run improvements of things such as income per capita, education and poverty

Question 6

Economic growth

Answer 6

an increase in the real value of goods and services produced as measured by the annual % change in real GDP.
Also, a long run increase in a countries productive capacity.

Question 7

Economic shocks

Answer 7

An unexpected or an unpredictable event that affects the economy

Question 8

Economic stability

Answer 8

Not many fluctuations in the economic cycle

Question 9

Emerging markets

Answer 9

Term used to describe the financial markets of developing countries

Question 10

Full capacity output

Answer 10

Level of GDP where all available factor inputs are fully employed

Question 11

Globalisation

Answer 11

A process in which countries have become increasingly integrated and interdependent

Question 12

Gross national income (GNI)

Answer 12

The total amount of money earned by a nations people and businesses, both inside and outside the countries region borders

Question 13

Green GDP

Answer 13

A popular term for environmentally adjusted gross domestic product

Question 14

Gross Domestic Product (GDP)

Answer 14

measures the total value of national output of goods and services produced in a given period (usually a year or quarter of a year)

Question 15

GDP per capita

Answer 15

National income per head of population

Question 16

Human development index

Answer 16

a summary measure of average achievement in key dimensions of human development in terms of:
•literacy
•Life expectancy
•PPP – real GDP per capita

Question 17

Infrastructure

Answer 17

The transport links, communications networks, sewage systems, energy plants and other facilities essential for the efficient functioning of a country and its economy. They often involve the production of public goods or the production process

Question 18

Infrastructure

Answer 18

The transport links, communications networks, sewage systems, energy plants and other facilities essential for the efficient functioning of a country and its economy. They often involve the production of public goods or the production process

Question 19

Lagging indicators

Answer 19

Indicators which tend to follow economic cycles E.G.unemployment

Question 20

Leading indicators

Answer 20

indicators which predict future economic trends E.G. consumer confidence

Question 21

Macroeconomic performance

Answer 21

how well a country is doing in reaching important objectives or key targets of government policy measured by changes and output, investment, prices, jobs, trade and living standards and also the distribution of income and wealth

Question 22

Manufacturing

Answer 22

it is one of the production industries concerned with using raw materials from the primary sectors, such as iron and coke and the production of finished goods, such as cars which are then sold in the tertiary industry

Question 23

National happiness

Answer 23

Measuring economic success based on societies general satisfaction with life rather than their financial satisfaction

Question 24

National income

Answer 24

The total income earned by all factors of production in an economy

Question 25

Nominal GDP

Answer 25

The value of all goods and services produced expressed at current prices (i.e. unadjusted for the effect of inflation.)

Question 26

GNI gross national income

Answer 26

income per head of the population – a measure of average living standards
E.G. gross national income per capita = GNI/total population

Question 27

Purchasing power

Answer 27

The buying power of a unit of currency. It is inversely related to the rate of inflation.

Question 28

PPP purchasing power parity

Answer 28

an economic theory that compares different countries currencies through a “basket of goods” approach.

Question 29

Real disposable income

Answer 29

Income after taxes and welfare benefits, adjusted for the effects of inflation

Question 30

Real GDP

Answer 30

Nominal GDP after it has been adjusted for inflation

Question 31

Real income

Answer 31

nominal income which has been adjusted for inflation

Question 32

Real income per capita

Answer 32

Real value of household income per head of population = real GDP (GDP which has been adjusted for inflation) divided by the resident population

Question 33

Service industry

Answer 33

industries which provide some sort of service, this includes the retail sector, the financial sector, the public sector, business administration and cultural activities