2.1.1 - Economic Growth

Question 1

Why is GDP a useful measure of standard of living

Answer 1

1. GDP per capita measures output per head, so the higher the number the better of the people are
2. Especially useful as a composite measure

Question 2

Why is GDP good to compare

Answer 2

GDP per capita divides by the population size so can compare countries with different population sizes

Question 3

Why is GDP not a useful measure of standard of living between countries

Answer 3

1. Doesn’t show what the money is spent on
   - > Hospitals / military etc
2. Doesn’t show the levels of pollution -> China
3. High earners distort the figure
4. Informal sector isn’t shown

Question 4

What factors influence national happiness and wellbeing

Answer 4

Physical/ mental health
Relationships
Job security
financial security
Political freedom

Question 5

What is the relationship between real incomes and subjective happiness

Answer 5

There isn’t any evidence that an higher income increases happiness

In the SR yes - can buy luxuries / pay of debt
In the LR no - becomes the norm/ used to it

People in LEDC’s aren’t less happy

Question 6

What is PPP

Answer 6

Value of a currency adjusted for a countries cost of living