Define economic growth
An expansion of the productive potential in the economy
What’s economic cycle?
The tendency of economic growth to rise and fall above and below trend rate of economic growth, causing booms and busts
What’s GDP?
The value of goods and services produced in a country over a given period of time
What’s GDP per capita?
Total GDP divided by the population of the country
Define nominal GDP
The value of GDP without being adjusted for inflation
Define real GDP
The value of GDP adjusted for inflation
What’s short run growth?
Calculated annually by the percentage change in real GDP
What’s long run growth?
An increase in the productive capacity of the economy
What’s actual rate of growth
Economic growth measured by change in real GDP
Define trend rates of growth
The average sustainable rate of average growth over a period of time
Define economic development
An increase in living standards, freedom, and life expectency
What’s the structure of an econmomy?
How the economy is made up in terms of what proportion of output comes from the different economic sectors
What’s the primary sector?
The part of the economy focussed on raw materials, such as farming or mining
What’s the secondary sector?
The sector which transforms raw materials into goods for consumers, the manufacturing industry
What’s the tertiary sector?
The part of the economy concerned with the supply of services
Define sustainable development
Development that occurs to meet the needs of the people of today without preventing future generations from meeting their needs; development that occurs without depletion of natural resources
What’s the human development index (DHI)?
Measures an economies development based on income, health and education
What’s the genuine progress indicator?
A measure of development calculated from 26 different indicators looking at economic, environmental and social factors
Define the measuring national wellbeing programme
A report which measures how lives are improving; asks four key questions about life satisfaction, anxiety, happiness and worthwhileness
What’s aid?
When a country voluntarily transfers resources to another or gives loans on a concessionary basis
What are remittances?
A sum of money sent back to the domestic economy of a migrant
Define unemployment
Those able and willing to work, but are not employed
What’s the labour force survey?
A measure of unemployment which surveys people to class them as unemployed, employed or inactive under the ILO definitions
What’s the claimant count?
A measure of unemployment; the number of people receiving benefits for being unemployed
Define inflation
The general rise in prices that erodes the purchasing power of money
Define deflation
The opposite of inflation, where the economy price level in the economy falls
Define disinflation
A falling rate of inflation; prices are still rising but not as much
Define hyperinflation
When the rat of inflation is high and accelerating, to the extent that it is out of control
Define consumer price index
An official measure used to calculate the rate of inflation, using a weighted basket of goods
Define retail price index
An old measure of inflation which has lost its national statistic status
What is the balance of payments?
A record of all financial transactions over a period of time between economic agents of one country to another
What’s the current account?
A record of the payments for the purchase and sale of goods and services, as well as income and transfers
What’s the capital account?
A part of the BOP; involves transfers of the ownership of fixed assets
What’s the financial account?
A part of the BOP; records FDI, portfolio investment and the transfer of gold and currency reserves
Define income and current transfers (75)
Net earnings on foreign investment, net cash transfers and transfers that have no return such as aid and grants