Economics

Question 1

Economic problem

Answer 1

Limited resources but infinite wants and needs of people

Question 2

6 factors to measure economy

Answer 2

Economic growth rate, unemployment rate, inflation rate, Human Development Index (HDI), Better Life index, Sustainability index

Question 3

Economic growth rate

Answer 3

The percentage change in GDP from one year to the next; nominal GDP includes price changes whereas real GDP is statistically adjusted to remove these changes

Question 4

Unemployment rate

Answer 4

The proportions of the labour force that are currently unemployed, excluding those who are not willing and able to work and those searching for work

Question 5

Inflation rate

Answer 5

The rate at which the general level of prices in a particular economy has risen in a year, adjusted to reflect buying pattern of households; both low and hyperinflation is bad for the economy

Question 6

HDI

Answer 6

Calculated by the UN based on expected lifespan, education and average income; higher HDI indicates a higher standard of living

Question 7

Better Life index

Answer 7

Calculated by looking at 11 different factors including GDP per capita, job security, air quality and work-life balance

Question 8

Sustainability index

Answer 8

There are many different sustainability indexes’ produced by different organisations

Question 9

4 ways the government can achieve higher living standards

Answer 9

Providing goods and services, regulating business activity, redistributing income, macroeconomic management

Question 10

Factors influencing consumers decisions

Answer 10

Price, marketing, availability of cost and finance, consumer preferences, fashion trends, convenience, ethical considerations

Question 11

Productivity

Answer 11

The amount of output produced by each unit of input

Question 12

2 ways to improve productivity

Answer 12

Improving quality of workforce (training pre-service or in-service), increasing quantity and quality of capital (tools)

Question 13

Capital widening

Answer 13

Capital stock increases at the same rate as the labour force

Question 14

Capital deepening

Answer 14

When stock increases at the same rate as labour force (usually results in greater productivity gain)

Question 15

Responses to improved economic conditions

Answer 15

Research new products, expand market share, invest in new technology/facilities, mergers, takeovers, acquisitions

Question 16

GDP

Answer 16

Gross domestic product, total value of all goods and services produced by a country in a year

Question 17

HDI

Answer 17

Human development index, a summary of a country’s average achievements in three categories: health, knowledge and standard of living

Question 18

Literacy rates

Answer 18

the percentage of the population of a given age group that can read and write

Question 19

Life expectancy

Answer 19

Measures how long, an average, people in a country will live to

Question 20

Gini coefficient

Answer 20

The distribution of a countries income

Question 21

External influences

Answer 21

Legacy of history (colonialism exploited resources living them with nothing), trade imbalances, transnational corporations, dependency on assistance and aid

Question 22

Internal influences

Answer 22

population growth, resource base, political instability, debt burdens, militarisation, environmental degradation, compounding issues