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Macroeconomics (theme 2) mrs phillips > ECONOMIC GROWTH KEY QUESTIONS > Flashcards

ECONOMIC GROWTH KEY QUESTIONS Flashcards

1
Q

What does aggregate mean?

A

Aggregate can also mean “total”,

total unemployment= aggregate unemployment

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2
Q

What is macroeconomics?

two definitions

A

Macroeconomics is concerned with the economy as a whole, large scale.

The study of interrelationships
at an aggregate level.

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3
Q

How do we judge whether an economy is performing well?

5 reasons

A 
Economic growth,
GDP,
Inflation rate,
unemployment,
balance of payments.
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4
Q

Name 3 sources of data for an economist.

Is there much alternative to this data?

A

(ONS) Office of national statistics which is data for the UK.

(IMF) International Monetary Fund.

the United Nations.

(little alternative to this as collecting data is time consuming and expensive)

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5
Q

How do you calculate percentage change?

A

NEW- OLD divided by OLD x 100

CHANGE/OLD x 100

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6
Q

What is an index number?

  1. How do you calculate index numbers?
  2. What is the base number?
A
  1. A device for comparing prices or quantities compared to a base number.
  2. Raw number/ raw base number x 100
  3. the base number is always 100
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7
Q

Define underlying rate of economic growth?

A

The long run average rate of economic growth for a country over a period of time. (long term)

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8
Q

What is actual rate of economic growth?

contrast this to Underlying economic growth.

A

The percentage annual increase in a country’s GDP.

This contrasts to underlying economic growth because that is a long run average.

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9
Q
  1. What is potential economic growth?

2. what can it also be called?

A
  1. Measure by the country’s potential change in level of output.

2 AKA trend growth.

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10
Q

How would you show economic growth on a diagram?

A
  1. PPF (production possibility frontier diagram)

2. economic cycle diagram

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11
Q

How is real GDP calculated

A

Growth of GDP In a period - rate of inflation

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12
Q

What is the nominal GDP? why Is it bad

A

Nominal GDP Is GDP not adjusted for inflation. can be misleading

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13
Q

Distinguish between total and per capita GDP.

A
  • Total GDP is the total output of the economy.

- GDP per capita is the total output of the economy divided by its population.

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14
Q

Distinguish between volume of GDP and value of GDP

A

volume of GDP is how many products and services are made.

value of GDP is monetary value of goods and services created in a time period.

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15
Q
  1. What is meant by gross national product?
A
  1. Gross national product is the total value of all products and services owned by a country’s residents.

This means that GNP can factor in output that has occurred outside the borders.

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16
Q

What is gross national income? (GNI)

A

GNI = GDP + net income from abroad.

17
Q

What is Purchasing Power Parities?

A

Purchasing power parities means equalising the purchasing power of two currencies by taking into account inflation and cost of living.

18
Q

Why do we use PPP adjusted figures for international comparison?

A

Because they are a better option to exchange rates that do not take into account cost of living and rate of inflation and exchange rates change frequently.

19
Q

What are the limitations in using GDP to measure living standards?

A

Because GDP is just the total output of goods and services so it does not account for environmental quality, level of health, inequality of income and increases in technology.

20
Q

What problems are there when comparing economic growth between developed and developing countries?

A
  • The growth in economy for developing countries will be a higher rate
  • as they are in a different stage in economy compared to developing countries.
21
Q

What is meant by gross national happiness?

A

it is an alternative way to measure economic performance to GDP.

  • it has four pillars that are:
  • good governance
  • sustainable development
  • promotion of culture
  • and environmental conservation
22
Q

Is there a link between income and happiness?

A

it could be suggested there is a link between income and happiness because a higher income can get you
more luxuries. But there is no direct correlation between the two.

23
Q

What is the human development index (HDI)

A

A statistical tool used to measure a country’s achievement socially and economically.

It takes into account: health, educational attainment and standard of living.

24
Q

How is HDI calculated

A

The mean of:
life expectancy
education
and GNI per capita.

25
Q

What are 4 other measures of standard of living?

A

Median household income,
GDP per capita,
Happy planet index,
Life expectancy.

Macroeconomics (theme 2) mrs phillips (19 decks)

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