Economic Performance Flashcards by Linus Neo | Brainscape

Q

Difference between actual and potential growth?

A

Point inside PPC move onto PPC.

Outward shift of PPC.

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Q

Measurement of Economic growth?

How to calculate?

A

Gross Domestic Product (GDP) and Real GDP Growth (positive means growth)

(CurrentYearGDP)-(PreviousYearGDP) / (PreviousYearGDP)

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Q

What to think of when “unemployment”?

A

Higher rate of unemployment –> Wastage of resources, resources not fully utilized (Within PPC)

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Q

What is healthy range of inflation? What is the use of being in this range?

A

Below 3%.

Savings and investors confidence protected because stable prices

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Q

Measurement of Economic growth?

How to calculate?

A

Consumer Price Index (CPI) and Annual Inflation Rate/ %△CPI (Positive means growth)

(CurrentYearCPI)-(PreviousYearCPI)/(PreviousYearCPI)

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