Chapter 2 Flashcards
(54 cards)
Population trends
The population in England is aging and this effecting the state pension age as the government is having to raise it as it cannot support the volume of pension age people.
Living standards and what this includes
This refers to the level of wealth, happiness , comfort, material goods and other necessities are an aisle to people.
One common measuring tool of this is GDP
Different sectors name of the economy
The primary sector - producers of raw materials
Secondary sector - processing of raw materials ie manufacturing.
Tertiary sector - good distribution/ service sector
Quaternary sector - sector providing education, training and R&D
Quinary sector - top level decisions ie government.
Uks growing service sector
80% of the uks GDP is now made up of the service sector.
Productivity and the four that contribute to it
There are four factors effecting productivity
Land
Labour
Capital
Enterprise
Productivity is a measure of the efficiency of the above four and can be calculated by adding all the above and then dividing by output.
Wealth income distribution
Income = the amount received by individuals and households from all sources
Wealth = households or under ideals stock of financial assets including cash, property and investments also chattles
Measuring distribution of wealth
This can be done using the Lorenz curve and the Gini coefficient
Gini coefficient
This ranges between 0 or 100% and is used in connection with a Lorenz curve
= area A/ Area (A + B)
Explaining wealth inequality
Employment changes
Decline of trade unions
Eroding value of minuimum wage
Government policy
Taxation
Technology change
Globalisation
Developing economies
They are fulled by two ways
Internally - when demotic demand grows the economy
Externally - when external trade deals and demand for national products pulls the economy into growth.
Climate change
This is effected by human activity and has not been helped by globalisation and now increases the risks associated with climate change. COP26 and the Paris agreement are meant to help fight these effects.
Globalisation and its effects on global markets
It brings global markets in much closer connection with each other meaning their cycles are far greater linked.
Globalisation definition
Increasing inter connectivity and interrelated nature of business and their financial systems. It also is used to describe how products around the world are becoming similar.
The WTO and the the OECD are set up to help with globalisation and help invigilators the situation the have come about because of them.
Market failure
This occurs when the freely functioning markets fail to deliver an optimum allocation of resources. This prevents equilibrium.
Externalities
These arise from production and or consumption of goods and services that affect other parties. These can be both positive and negative.
Public goods
Pure public goods are the complete opposite from private goods, they are provided by the govement for two main reasons
Non-exludability - they cannot be confined to those who have paid for them
Non-rivalry in consumption - consumption from one doesn’t reduce availability for another to consume.
Merit goods
This is what governments and societies regard a necessary to avoid under consumption. Meaning usually they are subsidies by the GOV.
They can be provided by both public and private sectors however usually generate positive externalities.
Monopoly and oligopoly
When one or a few select companies control the market
Types of Trade agreements
Unilateral trade agreement = when one poses restrictions on another or loosens them. With no response
Bilateral agregreement = between two countries usually lowering trade barriers to promote growth
Multilateral agreements = three or more countries are involved.
Protectionism
This is where a country makes I purposely difficult to import/ trade with another country or purposely easy to. It is about manipulating trade for the benefit of the host country and their objectives.
Economic cycle
This describes the course an economy take usually 7-10years in repeat. The main sectors are recovery, boom and recession. These sectors are splits by wither growth or deceleration.
Recovery - peak - slump - trough
Assets price bubbles and causes for this
This is where a price rises rapidly and leaves usual value and then is followed. Y a reversal of expectations in sharp decline. This is caused by three main conditions
Low interest rates
Asset shortage
Demand pull inflation
Economic shocks
This is an event that provides a significant change within an economy despite occurring outside it. This can be because of supply or repaid devaluation of a currency.
Economic indicators
National income, gross national product and GDP
