GDP Flashcards
Define unemployment
When people are willing and able to work but are unable to find a job.
Balance of payments definition
A record if the money flows into and out of a country in a year.
Exchange rate definition
The price of a currency expressed in terms of a foreign currency.
Economic growth
An expansion the productive capacity of the economy and hence an increase in real national output.
Inflation definition
A sustained rise in the general price level.
Gross domestic product GDP
The value of total output produced in a country in a year.
Income redistribution
The transfer of income from rich to poor to ensure everyone have access to necessities.
Economic stability
Avoiding volatilising in economic growth rates, inflation, employment and exchange rates. (Avoiding boom/busy with a stable economic cycle).
Richest countries top 5
- United States
- China
- Japan
- Germany
- United Kingdom
Objectives of governments
Economic growth Inflation Employment / Unemployment Economic stability Income redistribution The balance of payments
Three ways country measures GDP
Income method
Expenditure method
Output method
Income method definition
Add up all the factor incomes earned in the country in a year.
Expenditure method
Definition
Add up all the spending on goods produced in the economy in a year.
Output method
Definition
Add up the total value added or final value of goods and services produced a year.
Value added meaning
The selling price of a good minus the cost of raw materials
