Summary
Summary Topic 2.1-2.3 Notes
- Institution
- PEARSON (PEARSON)
Referred to each bullet point of the spec and used multiple sources for the notes
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2.1.1. Economic GrowthCross Domestic Product measuresthe of change
Rate of real GDP as a measure of economic growth
value of all goods
final and services a method to measure GDP is through the expenditure. They have a main components:C, 5, 6, (X M) and
producedin a year
an economy in add to give a GDP value
through income. You add up all incomes within
another method to measure GDP is
is
an
economy
Real-adjusted for inflection Images, interest, projects and rants)
Nominal -
adjusted for
not a
inflation consumers earn money income which they spend on goods and servical expenditure]
output expenditure
- which a rise in
can infer GDP a standards
Income
may lead to living
GNI measures the income cared
by citizens operating
outside
of Distinction
between ...
the country + GDP Real and Nominal
CNP ERP income from abroad to
GDP is
Nominal notadjusted for impaction
thatis by non residents
sent Real GDP is for inflation
adjusted
↳
the inflation
rate
ofsets in
the raise incomes thatoccur as a result of an GDP
increase in
factor
ppp, conversion of basketof total and per capita
goods is the total value
total GDP is of goods/services wither an economy
populations
↳
GDP per capita takes into account the difference in between counties. You take CDP
Easterlin of income
Paradox relation and
figure divide by the country's population. A the
gives average output income per person. It
and happiness up to a point
certain makes it to
easier compare standards of living amongstcountries.
Value and volume
goods/services are worth
↳value mous whatcertain
↳ volume shows the number
of goods/services thatare produced
↳
a country may import more as than exportbutcould record trade sumplus. Maybe because
value of X value of a butvolumes do not.
·
Other national income measures
Income
Cross National
↳worked outby taking it
GDP figure and adding to the income paid
into the counts by other countries
and dividends
such as interest
↳ income rather than
calculates output (GNP]
smaller forsigners send some of their
↳ have CN as the will
a country a
large foreign population will
income back home (e.g Ireland MNC Malo tax
corporation rate)
product
Gross National
2 includes value of goods/servical produced by citizens location. Outputof citizens
regardless of their
included
abroad is
moncing
·
of growth
comparison of rates and overtime
between countries
↳ ODP data less valuable than GDP per capita
no data
real data better than nominal
,·
of purchasing
understanding and the
Power parties use of PPP adjusted sigures into
in comparisons
↳
help compare costs between countries
of living (basketof goods)
and how much their
income buy, helps compare GDP vote
↳
of living
reflects cost can
GDP compare standards of living and overtime
·
Limitations of using to between counties
take into account value
in GDP does not the
quality of goods, itonly
improving final
counts their
only.
phone 10
A years ago some price as latest
one, contribution to GDP is
same. One country's GDP per capita
figure can be the same as another country thati s less technologically advanced and has worse 6/S.
Lo or
GDP does notinclude unofficial work,
good
unpaid some wonders
may volunteer and their
value of included. In LDCs, substitence
wordisn't
anature ishigh... goes
GDP is underestimate
↳
GDP
Increases in may notbe equally shared, could be the top 1%of population withhigh
income.
and GDP per capita ... high levels of inequality / cow the
pushes
it average income figures
standards of living.
↳ other factors affects standard of
GDP doesn't take into account living, e.g. pollution,
I
congestion, #9 hours worked, stress levels. GDP growth
Large 1 in output:1 income.
=
It can have negative impact on peoples health standard of living.
, 2.1.2. Inflation
Inflation an increase the
in general process of the
calculating of
rate inflation
in the us CPI
using
price level of goods/service within
is households are a
given survey and records the money spento n goods services over a period of weeks
ina decrease is
an economy resulting 700 basketof household goods servical updated
regularly
the
in powder of money
purchasing lighting system which indicate the household they have
income spenton them, is a
eighting
higher
a Δ in have
price will a impacto n spending
in
Deflation the
a decrease in general
price level of goods/services within
an
in
economy resulting an increase in weights xprice indexfigure of spending
the power of money
purchasing Price Index total sum of p light
x
total turn of Weight
Disinflation a decrease the
in rate rate:1%between base rate
Inflation and
e.g.
of infraction SY. Coiners to 4% the new index
number
· limitations GCPI in race
measuring of inflation ininaccuracy
I basketmay representall consumers
not habits
spending
2. are used by different
differentmeasurements of inflation countries (e.g RPI doesn'tinclude
costs)
housing
3. prone to inaccuracy errors, could be under or overvalued, impactpolicy decisions on inflation
rateon
economy
3. Difficulty of past comparisons, the basedof goods 10 years be different
ago will
3. habits
Consumption can change, makes itoutdated leg to instant coffee within
the
years doesn't sound)
· Price Index
Retail as an measure
alternalthe of the role of inflation
↳ RPI takes into accounthousing
costs (council tax, Mortgage payments
Interest
↳
they tend to be a costs tend to increase
on housing
figure
higher
at
a relatively high
rate
Lo
plummeted
in 2009.
·
cause of Inflation
DEMAND PULL INFLATION
PL
XS, ·an increase in
AD causes R. SDP to increase and overall the
general price level an
in
economy
·M.
Tin demand for goods services means the
economy more closer to full employment
&D2 Leads more the factors of
pressure in production, causes prices to rise povertime
employeeswanta wage rise, labour becomes scarcer.
R.GDP
·a demand
for labour denied from the demand for goods services
is ... made inflation
occurs
any componentof ABC, C,(C M) will
·
course demand put infraction
have more
consumers will come,
disposable in consume more. I inflation.
I
S
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