Chapter 7 Flashcards
GDP per capita
Average income per person in a country
GVP/population size
is vantages of GDP per capita
- Inflation might occur
- income might be an evenly distributed
- Type of goods and services produced would affect the standard of living
Disadvantages of HDI
- it ignores qualitative factors
- HDI doesn’t take income distribution into consideration
- HDI ignores environmental issues such as pollution
Why do standards of living defer between and within countries
PCRS R Good for Healthcare and education
- productivity level
- size of population
- role of government
- composition of GDP
- regional differences
- General price levels
- level of education and healthcare
- level of freedom
Causes of poverty
- High unemployment
- Low GDP per capita
- Low life expectancy at Birth
- low literacy rates/high illiteracy
- High population growth
- Poorinfrastructure
- low FDI(foreign direct investment)
- high public debts
- reliance on primary sector
- corruption
Policies to reduce poverty and redistribute income
- increasing economic growth by expansionary fiscal and monetary policies
- improving education healthcare
- providing state benefits
- using progressive tax
- increasing national minimum wage
Differences in economic development between countries
- differences in GDP per capita
- differences in population growth
- productivity
- size of primary secondary and tertiary sectors
- differences in education and healthcare
- saving and investment
Dependency ratio equals
Dependent population/working population
Effect of population change on consumers
Demand on goods and services changes
Effect of population size on firm
Changes in demand and supply of labor
Effect of population changes on government
- increase tax revenue
- increase pressure for government to provide more public service and welfare benefits
Effect of changes in population on the economy
-more pressure on The economy’s scarce
resources
increases AD, leading to more D pull inflation
Increases D on imports, worsen BoP deficit
Effect a population changes on the environment
- increase population size would lead to negative externalities as pollution and congestion
- depletion
Adv of GDP/capita
higher real GDP means people would have more to sp on g&s
HDI
composite indicator of SoL in a country, includes edu, healthcare & GDP/capita
