Standard Of Living/sustainable, Inclusive Growth Flashcards
Define government budget position and what it indicates
Govt budget position is the difference between govt revenue (tax revenue) and govt expenditure (public spending). Budget position reflects government’s ability to manage finances, and has implications on economic stability and the policies which it is able to implement during this period
Explain what GDP growth rate measures and what a high/positive GDP growth rate suggests
GDP growth rate measures percentage change in GDP from 1 period to another
It indicates pace at which country is experiencing an increase or decrease in RNY
A positive or high GDP growth rate suggests a HEALTHY and DYNAMIC ECONOMY
Define balance of trade (position)
Balance of trade measures the difference between a country’s export revenue and import expenditure
Define the Gini coefficient, and explain how it is used as an indicator for measuring changes in SOL
The Gini Coefficient is a statistical measure that quantifies the level of income or wealth inequality in a country. It ranges from 0 to 1, with 0 representing perfect equality, and 1 representing perfect inequality. The Gini coefficient is directly linked to material standard of living because it provides insight into how economic benefits and resources are shared among sectors of an economy. When the gini coefficient is low, it suggests a more even distribution of wealth and income in a country, meaning that a larger proportion of the population is benefitting from economic growth. In such cases, a significant number of people would be able to gain greater access to necessary goods and services such as education, healthcare, food and housing, leading to improvement in MSOL.
Additionally, a more even distribution of wealth and income increases access to opportunities such as quality education and job training, which empower individuals to improve their skills, seek better employment, and increase their msol.
