Economic indictors and their Significance Flashcards
(36 cards)
What are the Big 3 Economic Indicators?
The Big 3 economic indicators are Gross Domestic Product (GDP), Unemployment Rate, and Inflation Rate.
What does GDP measure?
GDP measures the total value of all goods and services produced over a specific time period, indicating economic activity.
What does the Unemployment Rate reflect?
The Unemployment Rate reflects the percentage of the labor force that is unemployed and actively seeking employment.
What does the Inflation Rate indicate?
The Inflation Rate indicates the rate at which the general level of prices for goods and services is rising.
What are the official targets for GDP, Unemployment Rate, and Inflation Rate?
Official targets often include a GDP growth rate of around 2-3%, an unemployment rate below 5%, and an inflation rate around 2%.
What is the formula for GDP?
GDP = C + I + G + (X - M).
What is the formula for the Unemployment Rate?
Unemployment Rate = (Unemployed / Labor Force) * 100.
What is the formula for the Inflation Rate?
Inflation Rate = (CPI this year - CPI last year) / CPI last year * 100.
What are the three types of economies?
The three types of economies are traditional, command, and market economies.
What characterizes a Traditional Economy?
A Traditional Economy relies on customs and traditions, often seen in rural areas where subsistence farming is common.
What is a Command Economy?
A Command Economy is centrally planned, where the government makes all economic decisions.
What defines a Market Economy?
A Market Economy is driven by supply and demand with minimal government intervention.
What is Fiscal Policy?
Fiscal Policy involves government spending and taxation decisions to influence the economy.
What is Monetary Policy?
Monetary Policy refers to the actions taken by a central bank to control the money supply and interest rates.
What is Expansionary Monetary Policy?
Expansionary monetary policy is used during economic downturns to stimulate growth by lowering interest rates.
What is Contractionary Monetary Policy?
Contractionary monetary policy is applied when inflation is high, aiming to reduce spending by increasing interest rates.
What are the phases of the business cycle?
The business cycle consists of four phases: expansion, peak, contraction, and trough.
What does Productivity measure?
Productivity measures the efficiency of production, often calculated as output per labor hour.
What are Material Living Standards?
Material Living Standards refer to the level of wealth, comfort, and necessities available to individuals.
What are Non-Material Living Standards?
Non-Material Living Standards encompass intangible aspects such as health, education, and environmental quality.
What is Gross National Happiness (GNH)?
GNH is a method to measure living standards that focuses on overall happiness and well-being.
What is the Human Development Index (HDI)?
HDI combines indicators of life expectancy, education, and per capita income to provide a composite measure of human development.
What is Opportunity Cost?
Opportunity Cost is the value of the next best alternative foregone when making a decision.
What are the four factors of production?
The four factors of production are land, labor, capital, and entrepreneurship.
