LU 6 Measuring Economic Performance

Question 1

Microeconomics

Answer 1

Prices and quantities of specific goods and services are studied in individual markets and an attempt is made to explain changes in these markets.

Question 2

Macroeconomics

Answer 2

Study the economy as a whole. Global economic magnitudes such as the total production of a country, total employment and the inflation rate.

Question 3

Balanced economic policy framework policy objectives

Answer 3

• Full employment
• Price stability
• External equilibrium
• Economic growth
• Equitable distribution of income and wealth

Question 4

National accounts

Answer 4

Provide information on the total production over a particular period

Question 5

More important national accounts

Answer 5

• Gross Domestic Product (GDP)
• Gross National Income (GNI)
• Gross Domestic Expenditure (GDE)
• Disposable income of households
• Gross and net capital formation

Question 6

Gross Domestic Product (GDP)

Answer 6

The total value of all final goods and services produced within the boundaries of a country during a certain period

Question 7

GDP calculation expenditure approach

Answer 7

GDP= C + I + G + X - Z
Where:
C= Final consumption expenditure by households
I = Capital formation (investment spending)
G = Final consumption expenditure by general government
X = Expenditure on exports
Z = Expenditure on imports

Question 8

Identity or equation always holds true for national accounts

Answer 8

Production (P) = Income (Y) = Expenditure (E)