Growth

Question 1

Real Income/ GDP

Answer 1

The most reliable measure as it meausre changes in actual output and can be easily measured. `

Question 2

Productive Capacity

Answer 2

Measures changes in potential output. Does no mean the economy is acutally producing this much.

Question 3

NSW

Net Social Welfare

Answer 3

Measures output alongside change in non-economic facotrs (HDI) but these can diffucult to measure.

Question 4

Sunrise and Sunset

Answer 4

Economic groth will benefit sunrise industries but will be of least benefit to the sunset industries facing a in sales and prfoit.

Question 5

Injections (5)

Answer 5

Any flow enetring the economy.
Governemt spedning
Transfer payements
Loans for investment 
Intrest recieved 
Export receipts.

Question 6

Withdrawals (5)

Answer 6

Any flow leaving the economy.
Indirect tax
Direct tax
Savings 
Interest paid
Import payments

Question 7

Injections and Withdrawals

Answer 7

When injectsion increase and exceed withdrawals, economic growth increaases. When withdrawals increase and exceed injections, growth decreases.

Question 8

Impacts postive

Answer 8

Increases standard of living 
Income/ employment 
profits
More effcient use of resources 
Increased tax revenue 
Goods/ services available
Better working conditions from better tech

Question 9

Impacts negative

Answer 9

Increase in spending on regulation & monitoring resource use
Resource depletion
Pollution
Congestion
Environmental impact
Overcrowding
Inequality/uneven impact
Inflation
House prices increasing

Question 10

Human investment

Answer 10

Investment in the qaulity and/or quanity of the workforce.

Question 11

Physical investment

Answer 11

Investment in capital goods and. or resources

Question 12

Nominal GDP

Answer 12

The value of all goods
and services
produced in a year
using current year
price levels.

Question 13

Real GDP

Answer 13

The value of all goods
and services
produced in a year
using constant/ base
year price levels.

Question 14

Answering format (Demand)

Answer 14

S= Situation
C= Component (Consumption spending, Investment spending, Government spending, net export)
R= Reason/ explanation
A= Affected (Ad1 to Ad2)
P= Prices level (PL1 to PL2)
P= Production (real GDP) (Y1 to Y2)
Economic growth increase or decrease

Question 15

Answering format (Supply)

Answer 15

Situation
What caused the shift and explain
Revenue unchanged, profit margin, profitability
How producers would react (increasing prices on output to maintain profit margins)
quantity supplied at each and every price level
Affected (AS 1 to AS2)
Prices level (PL1 to PL2)
Production (real GDP) (Y1 to Y2)
Growth increase/ decrease

Question 16

Reasons for aggregate supply shift

Answer 16

Cost of production
Cost of imported raw materials

indirect taxes
productivity
interest rates in nz

Question 17

Consumption spending

Answer 17

Transfer payments (increased)
Consumer confidence

Disposable income (increased)
Income tax (reduced)
Interest rates (decreases)
Price expectations

Question 18

Investment spending

Answer 18

Producers spending on capital goods
Business confidence

Interest rates (decrease)
Government policy (budget, policy on trade)

Question 19

Government spending

Answer 19

Spending by the govt, their budget (roads, education ,health care etc)
Transfer payements towards households so they can spend money

Question 20

Net exports

Answer 20

Foreign Tourist are export receipts (foreign currency)
Import payments
Export receipts for goods and services

Tariffs (tax on imported goods to protect local industry)

Question 21

Growth

Answer 21

Increase in the production of economic goods and services, compared to one period of time to another.

Question 22

Human Development Index

Answer 22

Measure and compare a country is social and economic development with those of other countries.
Health (Life expectancy at birth)

Education (expected years of schooling)
Income levels

Question 23

Limitations (Summary) (7)

Answer 23

Happiness and Wellbeing eg. number of hours worked
Non-Market activates eg. ignore volunteer, unpaid work
Environment factors eg. dos not count for the payment need to replace damage stuff, like oil spills.
Shadow income eg. black market
Sustainability growth e.g over expoloting natural resources
Makeup of GDP eg. consumption of GDP my be different
Inequality eg. rising income, increases the gap

Question 24

Household and Financial Sector

Answer 24

Financial: Depends on the household for savings
—- More savings increase loans for investment for producers.
Household: Depends on Financial for interest