100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
Economics (Macro)- Measures of Economic Performance (2.1) CA$14.66   Add to cart
Quickly navigate to
Preview
  2.  
  3. Economics - Measures Of Economic Performanc
  4.  
  5. Economics - Measures of Economic Performanc

Exam (elaborations)

Economics (Macro)- Measures of Economic Performance (2.1)
 4 views  0 purchase
  • Course
  • Economics - Measures of Economic Performanc
  • Institution
  • Economics - Measures Of Economic Performanc

Economics (Macro)- Measures of Economic Performance (2.1) 2.1.1 Economic growth a) Rates of change of real Gross Domestic Product (GDP) as a measure of economic growth An increase in GDP means economic growth. Economic growth is the rate of change of output. It is an increase in the long ...

[Show more]

Preview 2 out of 7  pages

Document information

  • September 9, 2024
  • 7
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • economics macro measures of economic performanc

Written for

  • Economics - Measures of Economic Performanc
  • Economics - Measures of Economic Performanc

Seller

avatar-seller
CertifiedGrades

Reviews received

Content preview

Economics (Macro)- Measures of Economic Performance
(2.1)
2.1.1 Economic growth
a) Rates of change of real Gross Domestic Product (GDP) as a measure of economic growth

An increase in GDP means economic growth. Economic growth is the rate of change of output. It is an
increase in the long term productive potential of the country which means there is an increase in the
amount of goods and services that a country produces. This is typically measured by the percentage
change in real GDP per annum . It can also be shown through the shift of PPF.

2.1.1 Economic growth
b) Distinction between:
-real and nominal
-total and per capita
-value and volume

Nominal values take numbers (i.e. prices) on the day into account. Real values take numbers (i.e. prices)
on the day while accounting for inflation
Total is the total whereas per capita is the total/the population
Volume x Price = Value

2.1.1 Economic growth
c) Other national income measures: Gross National Income (GNI)

Gross National Income is the value of goods and services produced over a period of time (GDP) + net
overseas interest payments and dividends (factor incomes)
GDP + Value paid in by other countries

2.1.1 Economic growth
d) Comparison of rates of growth between countries and over time

You can compare different countries' economic growth but remember-
Countries have different populations so having a lower GDP does not necessarily mean a lower standard
of living. GDP per capita (and PPP's) is needed to compare standards of living
There may be an increase in GDP based on inflation so you must use real values, not nominal values

2.1.1 Economic growth
e) Understanding of Purchasing Power Parities (PPPs) and the use of PPP-adjusted figures in
international comparisons

PPP rate is an exchange rate which takes into account the cost of an identical basket of goods in each
country. If a basket of goods is worth $5 in America and 17 RMB in China, the ratio is 1 : 0.29 so at
500,000 RMB, 0.29 x 500,000 = $147,000

2.1.1 Economic growth
f) The limitations of using GDP to compare living standards between countries and over time

, Countries have different populations so having a lower GDP does not necessarily mean a lower standard
of living. GDP per capita (and PPP's) is needed to compare standards of living
There may be an increase in GDP based on inflation so you must use real values, not nominal values

2.1.1 Economic growth
g) National happiness:
-UK national wellbeing
-The relationship between real incomes and subjective happiness

UK national well-being is measured by the UK National Well-being Programme which measures the
progress of the UK's quality of living. It looks at the economy, personal finance and satisfaction with
income, where people live and how safe it is, employment, health and life expectancy, education and
personal wellbeing.
As real incomes increase, happiness increases until it begins to plateau




2.1.2 Inflation
a) Understanding of:
-inflation
-deflation
-disinflation

Inflation is the sustained rise in general prices and the decrease in the value of money

Deflation is sustained drop in general prices and the increase in the value of money

Disinflation is a decrease in the rate of inflation

2.1.2 Inflation
b) The process of calculating the rate of inflation in the UK using the Consumer Prices Index (CPI)

Inflation rate = ((cost of a basket of goods [today] - cost of a basket of goods [in the base year])/cost of a
basket of goods [in the base year]) x 100




2.1.2 Inflation
c) The limitations of CPI in measuring the rate of inflation

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller CertifiedGrades. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for CA$14.66. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

73091 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
CA$14.66
  • (0)
  Add to cart