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Make a list of important economic indicators and explain what they indicate.
Gross Domestic Product
Gross Domestic Product measures the total value of all goods and services produced in an
economy in a given period of time in three wealth creating sectors, manufacturing, agriculture
and service industries. It is worked…
Index Numbers: make it easier to make yearly comparisons. E.G a base year of 2000 is given,
and given a value of 100. If by 2005 the prices have risen by 3%, then the index given to that
year is 103.
Unemployment is a key measure of economic performance…
of two main components, households and firms.
Households can be seen as individuals who own factors of production such as labour.
Firms are those who make use of the factors of production to produce goods and services.
Households provide the factors needed to produce goods and services, but they also…
Explain why income=output=expenditure.
Income is received as a return from firms to households in the form of wages, interest, profits
and rent. It is assumed that households will spend this income on consumer goods and services
and as a response to this demand, firms will produce output. In order to…