4346732
Description
Flashcards by Maya Khangura, updated more than 1 year ago
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Created by Maya Khangura
over 6 years ago
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| Question | Answer |
| What is Economic Growth? | Increase in output of a particular economy |
| What are the two ways of measuring Economic Growth? (2) | 1) Short Run (Actual) 2) Long Run (Potential) |
| What is short run economic growth? | Where a country ACTUALLY produces more than the previous quarter/year |
| What is long run economic growth? | Where a country COULD produce more than the previous quarter/year. |
| What does economic growth look like on a PPF? | |
| How is Economic Growth measured? (3) | 1) GDP Vs GNP 2) Nominal Vs Real 3) Annual Vs Quarterly |
| What is GDP? (2) | 1) Gross Domestic Products 2) Everything produced in a country |
| What is GNP? (2) | 1) Gross National Products 2) Everything produced by businesses 'belonging' to that country |
| What is Nominal? | The basic change in output |
| What is real? | The basic change in output, taking into account INFLATION |
| What is Annual? | Long term statistical figure |
| What is quarterly? | The figure used for analysing current performance |
| What is the most common measurement? | Annual Real GDP per Capita |
| How do you measure a percentage increase? | (difference/original)*100 |
| What are the methods for measuring Economic Growth? (3) | 1) Output Method 2) Income Method 3) Expenditure Method |
| What is the output method? | Count the value of all things produced in an economy over a given year |
| What is the problem with the output method? | Counting the same output twice- gives misleading figures (measured once as raw materials and then again as finished goods) |
| What is the Income method? | Count the amount of money paid to all workers in an economy over a given year |
| What is a problem with the income method? | Most people only use income earned in return for providing goods and services not benefits or pensions. |
| What is the Expenditure method? | Count the amount of money spent on goods and services in an economy over a given year. |
| What is a problem with the expenditure method? (2) | 1) Must include exports but not imports 2) Informal economy- very difficult to include/estimate |
| What is the governments economic growth objective? (3) | 1) Steady economic growth 2) No boom and bust 3) Sustainable |