Theme 2 - 3rd Learning Sequence - Measures Of Economic Perfromance

Question 1

What is the balance of payments

Answer 1

A record of a country’s transaction with the rest of the world. It shows the receipts from trade. It consists of the current and financial and capital account.

Question 2

What is the current account

Answer 2

Where payments for the purchase and sale of goods and services are recorded

Question 3

4 components of the current accounts

Answer 3

Trade in goods
Trade in services
Income
Transfers

Question 4

Trade in goods

Answer 4

The value of goods going out of the country minus the value of the goods into the country

Question 5

Trade in services

Answer 5

This is the value of services going out of the country minus the value of services coming into the country

Question 6

Primary income

Answer 6

Primary income is the net flow of profits, interest and dividends from investments in other countries and net remittance flows from migrant workers.

Question 7

Secondary income

Answer 7

A range of mainly government transfers to and from overseas organisations such as the European Union.

Question 8

Aggregate demand

Answer 8

The total amount of spending on goods and services produced in an economy during a Period of time

Question 9

Factors affecting consumption

Answer 9

Consumer confidence
Interest rates
Wealth
Household indebtedness

Question 10

Difference between gross investment and net investment

Answer 10

Gross investment measures investment before depreciation whilst net investment is gross investment less the value of depreciation

Question 11

Distinction between investment in human capital and physical capital

Answer 11

Investment in human capital is investment in the edification and training of workers whereas investment in physical capital is investment in factories etc.