Economic growth

Question 1

What is an economic agent?

Answer 1

consumers, producers etc..

Question 2

What is economic growth?

Answer 2

The long term expansion of the productive
potential of the economy.

Question 3

How is economic growth measured?

Answer 3

GDP.

Question 4

What is GDP?

Answer 4

The total number of goods and services produced in an economy in a given year.

Question 5

What is GNI?

Answer 5

The total income received by a country from its residents
and businesses all over the world.

Question 6

What is GNP?

Answer 6

The value of all products and services produced by the
citizens of a country both domestically, and internationally
minus income earned by foreign residents.

Question 7

What is Norminal GDP?

Answer 7

Value of total goods/services within an economy without inflation.

Question 8

What is real GDP?

Answer 8

The value of total goods/services within an economy with inflation.

Question 9

What does per capita mean?

Answer 9

The average per person

Question 10

What are benefits of economic growth?

Answer 10

higher FDI, lower unemployment, higher consumption and business confidence, etc

Question 11

What are negatives of economic growth?

Answer 11

More externalities, higher inflation, increased inequality etc..

Question 12

What are limitations of using GDP to measure living standards?

Answer 12

1. Purchasing Power Parity. When comparing living standards between different countries, it is important to take into account different purchasing power parity’s (PPP) – GDP per capita in $ terms does not necessarily reflect the local purchasing power of a country, 2.Economic activity not measured. Some countries may have large ‘black market’ or economic activity that isn’t measured by official statistics, 3 Poverty. Living standards need to take into account how income and expenditure are distributed through society. A country may have high GDP per capita but still have significant poverty

Question 13

What is the trade cycle?

Answer 13

The level of economic activity fluctuates over time, this
pattern is referred to as the economic or business cycle.

Question 14

What is the PPP (Purchasing, Power, Parity)

Answer 14

PPPs are the rates of currency conversion that equalize the purchasing power of
different currencies by eliminating the differences in price levels between countries.

Question 15

What is national happiness?

Answer 15

Societal and personal well-being looking beyond what an economy
produces, to areas such as health, relationships, education and skills,
housing quality, finances and the environment.

Question 16

What is national wellbeing?

Answer 16

Economic well-being refers to the overall standard of living and quality of
life of individuals and households within an economy.