Topic 4 - Economics and Socio-Environmental Realities Flashcards
The total value of the goods and services
produced by the residents of a nation during a specified period (as a year).
Gross National Product (GNP)
Total value of production by Filipinos,
whether here or abroad.
Gawa ng Pilipino
Gross National Product (GNP)
THE GNP COUNTS ONLY…
- The final value of goods and services
- The values of output currently produced
Advantages of GDP and GNP
- Comprehensive measurement
- International perspective
- Long-term trend analysis
- Income distribution analysis
- Economic productivity measurement
- Investment and business decision
- Fiscal and monetary policy formulation
Limitations of GDP and GNP
- Exclusion of non-market activities
- Neglect of quality-of-life indicators
- Disregard for income inequality
- Vulnerability to statistical inaccuracies
- Focus on quantitative aspects only
- Environmental impact neglect
- Inequality measurement challenges
An alternative indicator that is used to measure how development has improved human life
Human Development Index (HDI)
is an alternative economic metric that measures sustainable economic welfare rather than just economic output like GDP. It accounts for environmental, social, and economic factors, including income distribution, environmental degradation, and non-market activities (e.g., household labor, volunteer work).
Genuine Progress Indicator
adjusts GDP by adding positive contributions (e.g., education, infrastructure, leisure) and subtracting negative costs (e.g., pollution, crime, resource depletion) to provide a more holistic measure of societal well-being and sustainability.
Genuine Progress Indicator
It evaluates citizens’ quality of life by considering factors such as psychological well-being, health, education, environment, cultural diversity, and good governance.
National Happiness Index
is a measure of sustainable well-being that assesses how efficiently countries use environmental resources to support long, happy lives for their citizens. Unlike GDP, which focuses on economic output, ______ prioritizes happiness, health, and sustainability.
Happy Planet Index (HPI)
- The final purchase of goods and services by individuals
- A vital part of everyday living
- The biggest component of Gross Domestic Product (GDP)
Consumption
Consumption can be divided into two type of goods mainly:
durable and non-durable goods
The amount of money that households have available for spending and saving after income taxes have been accounted for
Disposable Income
Monitored as one of the many key economic indicators used to view the overall state of the economy
Disposable Income
Shows the relationship between disposable income and consumer spending.
It is assumed that the more income a household has in a given period, the more money is to be spent in consumption.
It can be used to estimate and predict spending in the future
KEYNESIAN CONSUMPTION FUNCTION
The proportion of each additional peso of
household income that is used for
consumption expenditures.
MARGINAL PROPENSITY TO CONSUME
Is another term for the slope of the
consumption line and is calculated as the
change in consumption divided by the
change in income.
MARGINAL PROPENSITY TO CONSUME
Measures how much more individuals will
spend for every peso/dollar earned.
Provides useful insights regarding the impact of income on buying habits.
MARGINAL PROPENSITY TO CONSUME
How to measure success by Habito?
“I’ve rated the economy’s performance
using my trademark ‘PiTiK test’ based on
the P-T-K combination of presyo (prices),
trabaho (jobs) and kita
(incomes)—yardsticks that common people
can readily relate to”
PiTiK ; Presyo, Trabaho, Kita
Why is GNP a means and not an end?
Mangahas 2015
GNP is a tool to achieve national progress, but the ultimate goal should be improving people’s well-being, happiness, and sustainability—not just increasing economic output.
Only 4.6% of income-earning Filipinos spend less than what they earned
True
PhP200 is the average emergency savings of a common Juan dela Cruz
True
Only less than 1% of households in Metro Manila own investments other than
their bank accounts
True
