Economic measures Flashcards
What does GNI show about development over time and the world
This show the value of everything country earns and how much money they make and how rich the country is.
Can be an indicator to how switched on a country is
A per capita figure can also be calculated for GNI
What is GNI and what does it measure
Total value of goods and services including oversea investment, FDI and remittances
What are the limitations of GNI
It accounts only for income in terms of economic development and offers no insight into quality of life.
GNI figures for countries with different currencies must be converted to a common currency and thus may not accurately reflect a specific country’s purchasing power.
doesn’t show informal
What is GDP and what does it measure
- the total (financial) value of goods and services produced in a country.
It can be divided by the total population of the country to work out a per capita (average per person) figure to use to compare to other countries
What does GDP show about development around the world and over time
GDP is important because it gives information about the size of the economy and how an economy is performing.
The growth rate of real GDP is often used as an indicator of the general health of the economy.
What are the limitations of GDP
The exclusion of non-market(outside country) transactions.
The failure to account for or represent the degree of income inequality in society.
What does PPP measure
Purchasing Power Parity (PPP) measures the price of certain goods in different countries which can help compare the purchasing power of different currencies
How does PPP link to development
compares different countries’ currencies through a “basket of goods” approach. PPP allows economists to compare economic productivity and standards of living between countries.
Limitations of PPP
pinned against dollar
harder to measure than market-based rates
Income per captia is what
The mean average income of a group of people
The total source of income for a country and divided by the population to provide an average
What is the Economic Sector Balance
The economy is split into four economic sectors and their importance changes as a country develops
How is the Economic Sector Balance calculated and what countries would be at each stage
Estimation of the contribution of each economic sector to the total national income
lic primary
nee secondary
hic quaternary and tertiary
What is holding back certain countries from changing sector
-Natural resource
-crisis
protectionism(Ghana chocolate)
