Economics, GDP and Unemployment

Question 1

What does the economy
refer to?

Answer 1

The economy refers to the production and consumption of goods and services.

Question 2

What is GDP?

Answer 2

Gross Domestic Product (GDP) is the total value of finished goods and services produced by a country in a single year.

Question 3

What are the positives of using GDP?

Answer 3

1) GDP is a standardised
measurement which allows us to
easily compare countries.
2) We can easily judge the change
in GDP and track growth (or falls)
in GDP over time.
3) It gives economists a tool to
provide advice to governments on
economic strengths and
weaknesses

Question 4

What are the negatives of using GDP?

Answer 4

1) GDP is only an economic indicator. It does not
show how well the wealth in a country is
distributed, the quality of life in that country (people
may be working 12 hour days to support the
increase in goods and services) or how much
pollution is being produced.
2) GDP only accounts for goods and services
passed through official channels, not the black
market or barter economy; this is important in
developing countries.
3) GDP data can be manipulated by poorer
countries to gain increased aid from developed
countries.

Question 5

What is Unemployment rate?

Answer 5

The unemployment rate is a percentage (%) of people that do not work out of all the people that can work.

Question 6

What is Economics?

Answer 6

Economics is the study of how societies use scarce resources (money and time) to produce goods and services and distribute
them among different people.