KEI and SOL Flashcards
Economies’ primary objective? Affected by what?
Improving SOL; 4 macroeconomic objectives
Two components of SOL?
Non-material and material
How is SOL measured?
- RNY per capita
+ taking into account - income distribution
- leisure time
- quality of environment
4 macroeconomic objectives of the government?
- sustainable and inclusive economic growth
- low unemployment
- price stability
- favourable BOT position
what do macroeconomic indicators do? (KEI)
measure economic performance
KEI –> macro objective –> indicator of economic performance
what are all the KEI? (measuring economic performance) –> what macro objective do they measure?
- real GDP/GNI (EG)
- real GDP/GNI per capita (EG)
- unemployment rate (U)
- consumer price index (CPI) (PS)
- inflation rate (PS)
- balance of trade (BOT)
some alternate KEI and purpose?
NM SOL:
- HDI (life expectancy and education indices)
- Leisure Hours per day
- Pollution Index
Material SOL:
- real GDP per capita (across time)
Gini coefficient: reflect income distribution
definition of economic growth
[1] EG can be defined as an increase in RNY (or output) of an economy over a specific time period, usually a year.
Most commonly measured by % change of economy’s real GDP
real GDP growth rate formula
[(Difference in real GDP between Y1 and Y2)/Real GDP in Y1 ]x 100%
sustainable growth definition
sustainable growth means that the rate of economic growth can be maintained without creating other significant economic problems for future generations
inclusive growth definition
inclusive growth is when rate of growth is not only sustained over a period of time, but also broad-based across economic sectors and creates productive employment opportunities for majority of the country’s population (social aspect of economic growth)
what does sustained eg comprise of and what is it? what does sustained eg then indicate?
GDP definition (6 parts)
difference between nominal and real GDP
GDP deflator formula + % change in real GDP formula
difference between real GDP vs real GDP per capita + GDP per capita formula + % change in real GDP per capita formula
what is GNI and how is it measured? + calculation for real GNI per capita
limitations for national income statistics in measuring EG and SOL
how does national income statistics reflect economic growth and hence economic performance + SOL?
how is it used to compare economic performance and SOL across time and space?
purpose of Gini coefficient and how does it work?
definition of material aspect of SOL
material aspect of SOL refers to the quantity and quality of g&s available for consumption by residents in a country
definition of non-material aspect of SOL
what is HDI (what are its components) and how does it work
