Economics.

- P. 319
- P. 320 GDP
o (what is it and name the methods of measuring)
 The total market value of all final goods and services produced within a
macroeconomy in a given period of time is the gross domestic product.
 The output method, the income method, the expenditure method.
o What is national income, output and expenditure
 National income; the total amount of income earned by all factors of production
of a country, whether they are employed at home or overseas
 National output; The total value of all goods and services produced by the
factors of production of the residents of a country.
 National expenditure; total level of output and total level of income.
- P. 321
o Real and nominal GDP (what is the difference)
 Nominal GDP measures output using current prices (with inflation), while real
GDP measures output using constant prices. (without inflation)
o What is GDP per capita
 Dividing GDP by the population gives the average income of each person.
 Indicating the average income of each person.
- 324
o Causes of Economic growth (just name it, 5)
 The discovery of more natural resources
 Investment in new capital.
 Technical progress
 Increasing the quality and quantity of human resources
 Reallocating resources
- 326
o Causes of recession
 loss of consumer confidence, high-interest rates, factor employment will
fall
o Its consequences
 income will fall and living standards will deteriorate.
 factor employment will fall, fewer goods and services are produced
o Explain economic recession, depression
 Recession; Short period of negative growth (six months- year) after that the
economy recovers and continues to grow.
 Depression; lasts several years where there is a constant fall in real GDP
- 327
o Consequences of recession
 Standard living will decrease
 Poverty increase
 Value of money decrease
 Look Zimbabwe cases
- 328
o Memorize graph of economic cycle and give stages
o Name the stages of economic cycle
 Growth, economic boom, economic recession, economic recovery
- 331
o Benefits of economic growth (6)
 Greater availability of goods and services
 Increased employment opportunities and incomes
 Low and stable price inflation
 Increased tax revenues for a government
 Improved living standards and economic welfare
o What is sustainable growth
 Reducing the rate at which we use up natural resources, reducing waste in
production
- 333
o Name policies to promote economic growth
 Demand-side policies, supply side policies
- 334
o Multiple choice, which one is not in supply side policy
 What is IN supply side policies
 Improvements to education and training, research and development,
modernizing existing and building new economic infrastructures, tax
cuts and subsidies, encouraging multinationals, improving recourse
efficiency
- 337
o What is full employment
 all of the workforce are at work, this keeps unemployment low)
- 343
o What are the causes, consequences and types of unemployment?
 Types; Frictional unemployment, seasonal unemployment
 Causes: moving homes, moving to higher paid jobs, are sacked or are made
redundant
 Consequences; frictional unemployment, seasonal unemployment, cyclical
unemployment
- 350
o What are the policies to reduce unemployment
 demand side policies and supply side policies
- 351
o Multiple choice; which item is not included in supply side policies to reduce
unemployment.
 Which is IN the supply side policies
 Measures to reduce the occupational mobility of labor
 Regional subsidies
 Employment subsidies
  Labor market reforms
 Restricting the power of trade unions
 Reducing minimum wages
 Cutting the marginal rate of income tax on low income
 Reducing unemployment benefits
- 354
o What is inflation (full explanation)
 the rate of increase in prices over a given period of time.
- 356
o What is consumer price index, CPI
 the instrument to measure inflation, a measure of the average change in
prices over time in a fixed market basket of goods and services
o What is it used for
 Measure Inflation
- 359
o Name the price indices
 as an economic indicator
 As a price deflator
 indexion
- 360
o Name one cause of inflation
 (too much money is chasing too little goods)
 (Because of the supply in money)
- 361
o What is the demand-pull inflation
 Inflation caused by an increase in total demandf
o What is cost of pull inflation
 Inflation caused by rising production costs passed on by firms to consumers.
- 362
o What is imported inflation
 Rising import prices
- 367
o Policies to control inflation (name them)
 Demand-side policies
 Tighten or contracts fiscal policy
 Tighten or contract monetary policies
 Supply-side policies
- 370
o What is deflation
 a process where prices of consumer goods and services fall and money
increases in value.
- 371
o What are the consequences of deflation (4)
 Consumers will delay many spending decision as they wait for prices to fall
further
 Household incomes fall as unemployment rises
 Firms cut their production and reduce the size of their workforce
 The value of debts held by people and firms rises