Extra Stuff

Question 1

What are the 3 sectors of the economy??

Answer 1

Primary= extractive production
Secondary= manufacturing and assembly of goods and services from raw materials 
Tertiary= commercial services supporting production and distribution of goods and services

Question 2

What does ‘economically inactive’ mean??

Answer 2

People of working age who are neither employed or unemployed eg retired people

Question 3

Two ways of measuring unemployment??

Answer 3

Claimant count= number of people claiming job seekers allowance

LFS= labour force survey, a survey of people declaring themselves unemployed, 60000 households surveyed each month

Question 4

Adv and Dis Adv of claimant count

Answer 4

Adv= a count is more accurate than a survey

Dis Adv= some people dont claim due to negative stigma
Some people aren’t actually unemployed but are employed in informal economy

Question 5

Adv and Dis adv of LFS

Answer 5

Adv= Internationally recognised so easy to compare
Includes people not eligible for JSA so therefore gives wider picture of unemployed

Disadvantage= could be sampling errors in survey
Depends on judgment of people, whether people are sick are actively seeking work

Question 6

What is hysteris??

Answer 6

Unemployment breeds unemployment, employers become reluctant to employ you if you’ve been unemployed for ages

Question 7

What are the 3 methods of calculating national income

Answer 7

Expenditure method= the sum of AD

Income method= the sum of income earned from the production of goods and services using factors of production

Output method= the value added by each enterprise in the production of goods and services

Question 8

How do you work out average propensity to consume and save???

Answer 8

APC= consumption/ income

APS= savings/income

Two answers should equal 1

Question 9

How do you work out marginal propensity to consume and save??

Answer 9

MPC= change in consumption / change in income

MPS= change in savings/ change in income