Measurements of Economic Growth

• One of the primary indicators of economic growth
• Measures the monetary value of all goods/services produced within a country's borders, in a specific time period (usually within a year but it can be every 3 months)
• Can consider the population if it's GDP per capita (GDP divided by population size)
• However the GDP doesn't say how the goods and services are distributed and it doesn't consider negative externalities (such as the environment or health)

Standard of Living

• An amount of wealth, comfort, material goods and necessities that a particular individual, society or country has
• Things that are included when measuring the standard of living
  • Education,
  • Infrastructure
  • Employment
  • Healthcare
  • The wealth of the country
  • The levels of debt in the country 

Quality of Life

• A more subjective way of measuring the living standards in a country, usually measures intangible/non-material things (such as freedoms and rights of individuals)

Human Development Index (HDI)

• Includes the GDP of a country, their literacy and numeracy levels (education), life expectancy and infant mortality rate (healthcare)

• The unemployment rate excludes
  • People under 15 
  • People who are retired 
  • People with injuries preventing them from working
  • People who choose not to work
• To get the unemployment rate as a percentage, you have to get the number of unemployed people divided by the total labour force, times by 100 
  • The labour force includes people over 15 who work at least 1 hour a week 
• Unemployment happens when
  • Jobs are replaced by technology
  • Markets become uncompetitive
  • There is a decline in economic growth (recession - less money means less spending which results in a drop in profits for the business so they can't hire more people) 

Different types of unemployment

Cyclical Unemployment

• When there aren't enough jobs for the number of people looking for work
• Happens when national spending and production (GDP) are weak - recession

Natural Unemployment

• The lowest rate of unemployment an economy can sustain over the long-term
• Causes of natural unemployment:
  • Frictional unemployment (someone who is between jobs or looking for a job after being fired)
  • Structural unemployment (a change in how goods and services are produced e.g. the introduction of machines in an assembly line)
  • Seasonal unemployment (jobs are cut off at the sam time each year because of changes in the season e.g. farming)

• An increase in a currency supply, relative to the number of people using it 
• Usually results in a rise in the prices of goods/services 

Causes of Inflation

• Cost-push inflation (an increase in the price of inputs like labour and raw materials)
• Demand-pull inflation (an increase in the price of goods/services as supply can't meet demand)