Economics Flashcards
(25 cards)
What are economic indicators?
Economic indicators are used to assess a country’s economic performance.
What is GDP?
GDP is the total value of all goods and services produced in a country in one year.
What is GDP per capita?
GDP per capita measures the average economic output per person by dividing the GDP by the population.
What is the growth target for GDP?
Governments aim for a growth rate of 2–3% annually.
How often are GDP figures released?
GDP figures are released every 3 months (quarterly).
What is a pro of using GDP as an economic indicator?
Provides data to track economic growth.
What is a con of using GDP as an economic indicator?
Doesn’t account for social and environmental factors.
What is inflation?
Inflation is a general increase in prices and a decrease in the purchasing value of money.
What is the target range for inflation?
The ideal inflation rate is between 2–3% per year.
What are the types of inflation?
Demand-pull inflation, cost-push inflation, and built-in inflation.
How is inflation measured?
By the Consumer Price Index (CPI), which tracks price changes in a ‘basket of goods’.
Who are the winners of inflation?
High-income earners, borrowers, importers.
Who are the losers of inflation?
Low- and middle-income earners, bank savers, exporters.
What defines unemployment?
A person is employed if they are over 15 years old and work at least one hour per week.
What is the target rate for unemployment?
4–5% unemployment is considered healthy for economic stability.
What are the types of unemployment?
Structural, cyclical, frictional, and seasonal.
What are living standards?
Living standards refer to the quality of life people experience.
What are the types of living standards?
Material and non-material.
How are living standards measured?
By the Human Development Index (HDI) and the OECD Better Life Index.
What policies can improve living standards?
Migration policy, training & workforce development, productivity policy, monetary policy, and budgetary policy.
What does the Gini Coefficient measure?
Wealth distribution, showing income equality.
What is the role of government in income redistribution?
Governments manage the economy and reduce inequality through welfare payments, superannuation, progressive tax policies, and provision of goods & services.
What is an economic depression?
A severe and prolonged downturn in economic activity.
What is an economic recession?
Two consecutive quarters of negative GDP growth.
