Economics Flashcards
What does GDP mean
Gross domestic product
The total value of output produced in an economy in a year
What are the impacts of GDP going down
The government gets less money in tax which means taxes go up and there is less public spending
Unemployment
Decreased welfare
What happens if GDP rises
People spend more , more jobs are created
More tax is paid , workers get better pay rises
More money for government
What are some limitations of GDP rising
Unpaid work like looking after children isn’t measured
Income inequality- GDP may rise from the rich getter richer rather than everyone
What do exporters prefer for the pound
Exporters prefer a weaker pound because it makes their products appear cheaper to foreign companies
Why do importers prefer a strong pound
Importers want a strong pound because it lowers the cost they pay to suppliers
Why would a decrease in interest rates lead to unemployment decreasing
People’s savings aren’t earning very much money in the bank and may need to find work
