Economics Flashcards
What is economic growth?
The increase in value of goods and services produced by an economy over time.
Three main indicators used to analyse the economy.
- Gross domestic product
- Inflation rate
- Unemployment rate
What is the purpose of having economic indicators
Important for analysing and understanding the performance of an economy
Why is GDP considered to be a limited or poor measure of progress in the economy
It is recognised to have limitations as a measure of overall progress and well being.
Outline the difference between nominal and real gdp
Real GDP provides a more accurate picture of actual changes in economic output.
Define Inflation
The sustained increase in the overall price level of goods and services over time.
Define unemployment
When people who are willing and able to work are unable to find jobs.
What is included in the labour force
Includes all individuals either employed or actively seeking employment.
What is the main cause of inflation
More demand than supply
Outline some of the consequences of high inflation
Less buying power
Confusion and planning issues
Confusing prices
Global competition issues
An advantage of high economic growth
Increased standard of living
A disadvantage of high economic growth
Environmental degradation
Define the term living standards
The quality of life enjoyed by individuals or groups within a particular society.
How can we measure a country’s standard of living
- GDP per capita
- Human Devlopment Index (HDI)
4 types of unemployment
- Frictional
- Structural
- Cyclical
- Seasonal
