Topic 2 - Objectives And GDP Macro

Question 1

What is GDP?

Answer 1

The total value of goods and services produced in an economy in a given period of time

(Gross domestic product)

Question 2

Why is GDP a useful indicator?

Answer 2

It gives info about the size of an economy and how well the economy is performing

Question 3

Disadvantages of GDP as an indicator

Answer 3

Does not include non-market transactions
Does not indicate if the nations rate of growth is sustainable
Does not show a degree of income inequality in society
Doesnt show reasons for amount of GDP

Question 4

Relationship between objectives and indicators

Answer 4

Objective: Measurement:
Economic growth ➡️ Real GDP
Reducing unemployment➡️ Labour force survey
Price stability ➡️ Inflation
Stable balance of payments
on a current account ➡️ Payments for imports/exports and other financial flaws

Question 5

Key macroeconomic indicators

Answer 5

Budget deficit
Unemployment
Growth
Inflation
Trade

Question 6

Key Macroeconomic objectives

Answer 6

Low unemployment
Low/stable inflation
Balanced budget
Balanced trade policies
Sustainable growth
Environmental protection

Question 7

GDP per capita

Answer 7

The amount of GDP per person