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Economics 144 Summary
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Economics 114Theory
, ¥601701716511k
•
CHAPTER ONE •
> THE CAPITALIST REVOLUTION
.
Measuring Living standards
-
-
•
Gross Domestic Product ( GDP ) : an
economy 's size
the value
goods produced in country
-
market of all a
total income earned within a
-
country
living
•
GDP per capita measures standards
average :
G- DP
income population
-
per person or
-
Measuring Economic Growth
-
Change in GDP
Growth Rate =
original level in GDP
'
• '
hockey
-
stick curves represent the sustained rapid growth in GDP per capita experienced by countries worldwide .
↳ sustained in standards close to 7
no
growth living for country
-
timing of sustained growth
occurred @ diff .
pts in time .
measuring living standards
( GDP per capita ) = measure
total goods / services
Inequality
-
and Growth produced
-
in a country → G- DP which =
•
sustained began @ diff
"
occurred diff
by countries
Whn growth it . times in .
Places .
divided pop
measures market value of in / out
Timing Growth puts in given period
-
of -
•
Growth take -
off occurred @ diff .
points in time for diff countries
-
Brittan = 1ˢᵗ country to experience sustained economic growth [ it began around 1650 ]
Japan
-
In it occurred around 1870
,
-
The kink for China + India happened in the 2nd half of the 20th century .
00
In some economies substantial improvements in people 's living standards ≠ until gained independence frm
→ occur they
colonial rule / interference by European nations .
THE INDUSTRIAL REVOLUTION
CAPITALISM :
the permanent technological revolution
> a TECHNOLOGY is a process tht uses a set of inputs including materials
machinery and labour to produce an
output .
, , ,
> TECHNOLOGICAL process means to labour = needed to produce the same output .
> for millennia technological process was v. Slow .
>
since REVOLUTION we've
the INDUSTRIAL witnessed a
permanent technological revolution .
, ¥601701716811k .
•
CHAPTER ONE •
> DIS POSSIBLE INCOME
G- DP per capita ≠ disposible
•
measures are . income but income
↳ amt . of wages / salaries / profit / rent / interest t transfer payments frm organisations
DISPOSIBLE good food / / goods services
INCOME living standards
housing Clothing / other
→
=
measure of Max .
9Mt . Of t
income
•
=
major influence on well
being
-
> the starting point :
National GDP
estimating given
-
Whn the market value output for a period
→
by multiplying quantities of vast array of diff .
goods / services by prices .
NOMINAL GDP is written as :
( price of yoga lesson ) -
( number of yoga lessons )
t
( price of book ) ( of books )
t
-
a number . . .
+
( price ) -
( quantity ) for all
goods + services
IN GENERAL WE WRITE THT :
,
nominal GDP = É
Pichi
i
where p; is the price of good i
, qi is the quantity of i and É indicates the sum of price times quantity for all the goods / services tht we count
Real GDP
taking account of price changes time :
over
>
HISTORY 'S HOCKEY STICK GROWTH IN INCOME
:
whether want to levels rates
• we compare or
growth
" "
•
the stick makes it easy compare the level of GDP per capita countries
hockey to across
°
a ratio scale makes it possible to
compare growth rates across countries t diff .
periods
→
ratio scale
grows @
=
used : a series tht a constant rate looks like a Str line
→
the i. [ or proportional growth rate ] = constant
ratio
•
A in scale
line chart faster rate
=
steeper
> THE PERMANENT TECHNOLOGICAL REVOLUTION
>
NB new technology introduced in textiles transportation
energy
= +
,
&
Cumulative character led INDUSTRIAL REVOLUTION
→
being called the
↳ the ideas , discoveries
new era =
brought new
,
methods and machines
'
making old ideas = obsolete
"
"
>
machinery
=
technology refers to
,
equipment and devices developed using scientific knowledge .
TECHNOLOGY [ including
-
=
a process tht takes a set of materials t other inputs wrk Of people t
machinery ]
"
'
> TECHNOLOGICAL PROCESS revolutionized production time pair of shoes 12 in
as
by
=
→
required to make a fell a
few decades
s marked beginning a
permanent TECHNOLOGICAL REVOLUTION → be the amt of time =
required for production =
fell over generations .
>
TECHNOLOGICAL CHANGE IN LIGHTING
•
we measure technological process in
lighting by how
many units of brightness called lumens →
generated by an hr of work
>
in m2
1 lumen =
approx . the amt of brightness a of
moonlight .
•
process of innovation end / INDUSTRIAL REVOLUTION
≠ as labour in
lighting
→ shows
w case of
'
it =
continued wl application of new tech [ ie .
steam
engine electricity , transport +
recently the revolution in info
,
processing t communication
→
broadly applicable tech innovations =
particularly strong impetus to
growth in
living stnds
bc they change the tht the
way large parts of econ .
wrks .
↑
•
reducing 9Mt . of wrk time needed for production →
tech changes allows significant in living Std .
, ¥601701716511k .
•
CHAPTER ONE •
> THE ECONOMY AND THE ENVIRONMENT
long physical economic changes [ ie Climate change / global warming ] appropriate policies governments could adopt
◦
term tht
t
consequences of these t
-
.
◦
frm global climate change → local resource exhaustion :
the effects = results of both the expansion of the
economy t the way the economy
=
Organized
>
relationship btwn the economy + environ men = 2 ways :
>
we natural resources in production affect environment in its to
use which may the we live +
capasity support
future production
•
The PERMANENT TECHNOLOGICAL REVOLUTION
I
brought about dependence on fossil fuels may part of solution to
today 's environ problems
-
=
.
.
physical environment
biosphere
society
economy
v
the
economy
=
part of society which =
part of biosphere
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