eg

Question 1

what is eg

Answer 1

• ↑ in amount of g+s (GDP) the whole economy can produce over and above what it produced last year.

Question 2

measuring eg

Answer 2

gdp in diff time periods

rate growth = % chnage in gdp per year/quarter

Question 3

nominal gdp

Answer 3

change in $ value of output overtime

Question 4

real gdp

Answer 4

change in $ value of output overtime (adjusted to inf)

Question 5

gdp per capita

Answer 5

real $ value in output / pop

Question 6

real gdp per capita

Answer 6

most meaningful

real ability to satisfy cit. needs and wants

Question 7

real gdp per capita if gdp increase due to pop

Answer 7

if total gdp ↑ but pop ↑ at higher rate, then ↑ gdp is due to more people

Question 8

sustainable economic growth

Answer 8

future LS and opps are not compromised by current growth in period

Question 9

inc eg (sustainable)

Answer 9

environmental psu (pollution) & cell depletion

Question 10

achieving eg

Answer 10

2QCELL

Question 11

technical efficiency (achieving eg)

Answer 11

inc output with same / smaller inputs

Question 12

allocative efficiency

Answer 12

better allocation to reduce opp cost

Question 13

dynamic efficiency

Answer 13

ability to adapt quickly and move resources to productive sectors

Question 14

tech progress

Answer 14

changes in tech/scientific knowledge applied to production progess

Question 15

embodied

Answer 15

change in development of c goods

Question 16

disembodied

Answer 16

change in processes & techniques

Question 17

research & development (tech progress)

Answer 17

innovation - competitive advantage to rivals

lower costs / inc efficiency

Question 18

measuring tech progress

Answer 18

productivity - measures output from given amount of input
labour productivity - per unit output per unit labour
multifactor productivity - indicator of productivity

Question 19

inflation

Answer 19

rise in general level of g+s over time

Question 20

measuring inflation - CPI

Answer 20

determines price changes produced by abs

- compare current prices with past prices

Question 21

CPI calc (previous q)

Answer 21

100000 g+s (basket)

Question 22

CPI - weighting

Answer 22

more important items (fuel) have higher weighting compared to less important items (hire cars)
- renewed every 5 years (items change)

Question 23

measuring inflation using CPI

Answer 23

measured price movements not price

- impacts pp, pp indicator includes tax&int.

Question 24

CPI = headline inflation rate

Answer 24

measures changes in cost of purchases made by wage and salary hh
some rise some fall

Question 25

headline items include..

Answer 25

items that are volatile or caused by short term factors | cpi is longterm>shorterm

Question 26

limitations of headline inflation

Answer 26

- only measures capital cities - does not reflect substitutions in response to price change - no account for change in price overtime

Question 27

underlying inflation

Answer 27

measures inflationary psu in econ due to market forces (supply and demand) rbausing cpi

Question 28

trimmed mean

Answer 28

all price movements from big to small then removing 15% each side

Question 29

weighted average

Answer 29

weighted median selects middle price movement

Question 30

demand pull

Answer 30

- shortage in supply - demand is higher = higher price - low unemployment rates

Question 31

cause of demand pull

Answer 31

- growing econ - increasing x demand - expansion of income

Question 32

demand pull vs cost push

Answer 32

cost-push inflation is driven by supply costs while demand-pull inflation is driven by consumer demand

Question 33

cost push

Answer 33

Cost-push inflation occurs when overall prices increase due to increases in the cost of wages and raw materials.

Question 34

causes of cost push

Answer 34

higher costs of production decrease the aggregate supply in the economy.

Question 35

benefits of inflation

Answer 35

shows growing econ | For example, borrowers at fixed interest rates tend to benefit from inflation while lenders and savers are hurt by it.

Question 36

demand pull example

Answer 36

AUS - boom - unemployment rates fall -