| What are the 4 Macroeconomic Indicators that helps see a Nation’s Economic Performance? | -Rate of Economic Growth
-Rate of Inflation
-Level of Unemployment
-Balance of Payments |
| How can Economic Growth be Measured? | -Measures the Changes in the National Output over a Period of Time |
| What is the National Output? How can it be Measured? Connect it with GDP | -National Output is all the Goods and Services made by a Country
-Output can be Measured by Adding up the Quantity of Goods and Services made in 1 Year.
-Or by Calculating the Value of all Goods and Services Made in One Year. This is GDP |
| How else can GDP be Calculated? [Not National Output | -Calculating the National Expenditure [Aggregate Demand] or adding the National Income Made in a Year |
| What is a
1. Boom
2. Recession and Slump
3. Economic Depression | 1. Booms are when there is a Long Period of Economic Growth Rates
2. If there is Negative Economic Growth for 2 Consecutive Quarters, then a Recession is in Place. A Slump is just a Long Recession
3. Economic Depression is a Sustained Economic Downturn which lasts for a Long Time |
| What is the Difference between Nominal GDP and Real GDP? Why does it even matter? | -Nominal GDP is the GDP Figure that hasn’t been Adjusted for Inflation, while Real GDP is when Inflation has been Accounted for
-This is Important as since GDP is the VALUE of the Goods and Services, so Inflation can Impact it [Make the Value go Up] but this doesn’t mean the Economy is actually Growing.
-So if the Real GDP is Negative, but Nominal is Positive, there may be just very High Inflation |
| What can GDP per Capita show off? State the Formula | -This can show off the Standard of Living in the Nation. This is just National GDP Divided by the Population Size
-If the GDP per Capita is High, then the Standard of Living is also High |
| What does
1. GNI
2. GNP
Measure? | -GNI [Gross National Income] is GDP + Net Income from Abroad - which is Earned on Investment and other assets owned Abroad, Minus any Income earned by Foreigners on Investments Domestically
-Gross National Product is the Total Output of the Citizens of a Country, Resident or not. |
| What, and why do we use, Purchasing Power Parity [PPP] | -Comparing GDP per Capita across Nations that use different Currencies may not give an Accurate Picture, as the Worth of the Currency is not being Considered
-PPP is the Real Value of an amount of Money in terms of what you can Buy with. £1 can get more Goods in Zimbabwe rather than Switzerland
-PPP therefore will Adjust the GDP per Capita to account the PPP Disparities, usually shown in $ |
| What are the Limits of GDP and GDP per Capita? | -The Hidden Economy - Economic Activity that will not show up in Figures [Cash in Hand, Homewife]
-Public Spending: Governments may give more Benefits than Others. So 2 Nations then with Similar GDP per Capita numbers, but 1 may spend more to Provide Benefits that help the Nation and Standard of Living
-Income Inequality. 2 again may have Similar figures, but the Distribution of Income may be Abysmal
-Other Differences in Standard of Living [Hours worked, Working Conditions, Damage to Environment and Spending needs] |
| What are Index Numbers - why are the used? [GDP] | -These just track Change in a Particular Variable. They use a Base Number [100] and go from there
-For GDP, it can show off how much, in % the Economy [GDP] has Grown |
