Ch 2 macroeco, globalization and health

Question 1

Define “Appreciate.”

Answer 1

When a currency is rising relative to other currencies, it is appreciating in value.

Question 2

Define– Balance of payments (BOP).

Answer 2

Measures currency flows between countries.

Question 3

Define– Constant dollars.

Answer 3

Correspond to values that have been adjusted for inflation, and so reflect the ‘real’ or actual purchasing power

Question 4

Define– Current dollars.

Answer 4

Actual dollars spent, without adjustment for inflation

Question 5

Define– Depreciate.

Answer 5

When a currency is falling relative to other currencies, it is depreciating in value.

Question 6

Define– Depression.

Answer 6

Sustained, long-term downturn in economic activity – more severe than a recession.

Question 7

Define– Balance of payments (BOP).

Answer 7

Measures currency flows between countries.

Payments made to other countries are seen as debits (e.g. imports), and payments received from other countries are seen as credits (e.g. exports). So an important indicator of a country’s performance in international trade and investment is the level of surplus or deficit in their balance of payments.

Question 8

Define– Gross national income (GNI).

Answer 8

Measures the economic activities undertaken by citizens and firms of that country, regardless of where it takes place. GNI is GDP plus income earned by citizens abroad, minus income earned in that country by foreign citizens.

Question 9

Define– Inflation.

Answer 9

General rise in prices over time. This means that money loses its value through time.

Question 10

Define– Purchasing power parity (PPP).

Answer 10

Exchange rate that equates the price of a basket of identical traded goods and services in different countries.

Question 11

What is macroeconomics?

Answer 11

macroeconomics looks at the performance and functioning of the economy as a whole

Question 12

What is economic growth?

Answer 12

economic growth is a positive change in the level of production of goods and services by a country over a certain period of time. GDP is the main indicator that is used to measure the size or output of an economy. GDP is the total value of goods and services produced within one year in a country

Question 13

What’s the problem w/ comparing GDP across countries?

Answer 13

One problem with comparing GDP across countries is that prices vary in different countries. This affects the total amount of the GDP.

Question 14

Define– Purchasing power parity (PPP).

Answer 14

Exchange rate that equates the price of a basket of identical traded goods and services in different countries.
Often this exchange will occur to convert GDP’s into comparable numbers.

Question 15

What is a “price index”

Answer 15

A way to measure inflation. A virtual basket of common household goods and monitored for changes in prices. The price index is set at 100 for a base year, then subsequent years and changes are compared to this base year.

Thus, if the price index was set at 100 for the year 2000, and the price index was 112.4 in 2001, the inflation for 2001 would be 12.4 per cent

Question 16

What is “exchange rate”?

Answer 16

Exchange rates tell you how much one country’s money is worth in another country’s currency. So the money is appreciating or depreciating.

Question 17

What is “exchange rate”?

Answer 17

Exchange rates tell you how much one country’s money is worth in another country’s currency. So the money is appreciating or depreciating.

Effects imports and exports.

Question 18

What are seen as the advantage of “free trade” between countries?

Answer 18

• encourages each country to specialize in making the goods they’re good at
• increases variety, while reduces price
• higher employment and govt revenue

Question 19

What are some barriers to “free trade”?

Answer 19

• countries putting up barriers to protect “domestic production” such as tariffs, restrictions and bans

Question 20

What is the “law of special advantage”?

Answer 20

Economic growth through specialization.

Question 21

What factors influences economic stability of a country?

Answer 21

• how much of the country’s income/ growth dependent on trade
• an economy more reliant on trade will be inherently more ‘unstable’ – unable to absorb external economic ‘shocks’, such as an oil shortage, exchange rate fluctuations and international competition

Question 22

Does wealth = health of a country?

Answer 22

Not always, especially initially. For the poor, it maybe disadvantage due to:

• increased cost of living
• chronic disease
• pollution
• urban development
• unsafe working conditions

Question 23

Macroeconomics contributes to the spread of communicable diseases takes place in what two ways

Answer 23

1. people with wealth live in healthier environments (pollution, sanitation, etc)
2. increased movement of ppl, animals, goods

Question 24

What are the trends seen between macro economics and non-communicable diseases?

Answer 24

• Trade liberalization decreases the cost of “bads”– tobacco, alcohol.
• Pop. consume more high- calorie diets.
• Changes in labor (technology replace labor) allow for more leisure time and sedentary lifestyles.

Question 25

Tax-income is broadly divided into which two groups? Examples of each.

Answer 25

1. Easy to collect– tariffs, international trade.

2. Hard to collect– consumption, income tax. Because some economies are informal like subsistence farming.

Question 26

What are some trends seen in the globalization of health related goods and services?

Answer 26

1. Production of pharmaceuticals and equipment concentrated in HICs, and LICs have to import them.
2. Technology has led to tele-health, diagnostics,
3. Health tourism

Question 27

What are some trends seen in the globalization of health related goods and services?

Answer 27

1. Production of pharmaceuticals and equipment concentrated in HICs, and LICs have to import them.
2. Technology has led to tele-health, diagnostics,
3. Health tourism
4. Health professionals leaving their country for richer countries.