4.1.1 Growing Economies Flashcards
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What is the main mesure of wealth?
The main measure used is Gross Domestic Product (GDP)
What is the calculation for GDP per captia?
Gross Domestic Product / Population
As GDP per capita rises, it is also assumed that ________?
the living standars of the contrey also increase
What does investing in HUMAN CAPITAL do?
raises the average level of literacy in an economy
What raises Economic growth?
Incresed Demand
How does Increased Demand raise Ecoomic growth?
Incresed Business sales –> Increased profits for the business –> Means they can Reinvest money back into R+D or expansion. This can lead to larger product ranges or more staff.
Why is business expansion good for the econemy?
Leads to more pople having jobs which raises the average wage and causes more competition and leads to all businesses increasing wages to become more competitive
What are the 4 main indicators of Growth?
Gross Domestic Product (GDP) per capita
Literacy
Health
Human Development Index (HDI)
Whate are some Implications of economic growth?
Improvements in the standard of living for consumers
As real wages increase labour can substitute work for leisure, and therefore see dramatic changes in their level of income
Increased income allows people to spend more on necessities at lower levels of income and more on luxuries at higher income levels
As GDP per capita rises, it is also assumed that ______ in that country also rise?
living standards
There is a close correlation between increased productive capacity and the ____________ as the workforce improves?
‘development’ of human capital
What is the Human Development Index?
It measures economic development in terms of three criteria:
- Life expectancy at birth
- Years of schooling
- Real Gross National Income per capita at Purchasing Power Parity (PPP)
