Economics SBA Flashcards
wealth
Stock of both real and monetary assests which have been accumulted over time and which enable people to make an income.
national wealth
wealth owned by individuals, businesses or the state
income
remuneration earned by FOP for participating in economic activities.
sources of wealth
Income
Savings (S = Income - consumption)
Inheritance
Luck
income distribution
the way in ehich income is divided amngst households.
economic growth
increase in the production of goods and services in a country over a year measured in terms of real GDP (GDP considering increase in genral price levels)
productivity
refers to the number of goods and services produced given current input levels
Methods of economic growth
Increase productivity
Utilisation of production factors: increase in labour force, better utilisation of land, capital widening and deepening
Technological advancement
Govt policies: more exports, growth of tourism and manufacturing industries. Minimising wastage of time and resources
Investment: in capital which increases production (requires savings)
economc development
an increase in real GDP per capita which leads to higher standards of living
development methods
- Develope skills: increases employability for higher income jobs
- Expand local markets: Encourage buying local, focus on increasing exports and discouraging imports
- Direct investment: Upgrading infrastructure to meet the needs of the community.
- Development of human resources: Education, healthcare, population planning
- Capital: Increasing savings, taxation, foreign investment and foreign loans
- Technology: Increased production and competitiveness. Greater output of skilled workers is required
money
An accepted medium of exchange
exchange value
the quantity of a good or service that money can buy
velocity of money circuation
the rate at whic money circulates
measurement of the value of money
CPI - changes in cost of a typical basket purchased by urban households
inflation
continous incease i the genral price level
