1) Sustainable economic growth 2) Low unemployment 3) Control Inlfation (CPI =2%) 4) Satisfactory Balance of Payments (low current account deficit)
1 of 15
Other 4 economic objectives
1) Stable exchange rate 2) Low government borrowing 3) Maintaining equality 4) Protecting the environment
2 of 15
Real GDP per Capita
The average income of a citizen (taking into account inflation)
3 of 15
Limitations of GDP as a measure (6 things)
1) difficult to calculate total output of economy as doesn't take into account underground economy
4 of 15
number 2
2) negative externalities-overestimates living standards on this count
5 of 15
number 3
doesn't take into account how hard people work
6 of 15
number 4
ignores distribution of income
7 of 15
number 5
depends what economy produces, eg it is preferable to spend on healthcare over military spending
8 of 15
number 6
When comparing countries GDP- there will be different purchasing power of local currency eg in India a $ would buy more than in Japan
9 of 15
Human Development Index (HDI)
Alternative measure of economic welfare; takes into account real GDP per capita also includes health and education standards
10 of 15
Human Poverty Index (HPI)
This also takes into account distribution of welfare
11 of 15
Causes of Growth (2)
1) in SR, increase in AD (AD=CIGS) 2) in LR increase in LRAS (productive capacity)
12 of 15
Sustainable Economic Growth
1) low inflationary growth 2) Environmentally sustainable 3) Growth that is not dependable upon growing levels of personal debt
13 of 15
Environmental Sustainability
In LR, growth has to be sustainable- if growth is caused by cutting down forests or creating pollution, it may lead to lower standards of living in the future
14 of 15
Environmental Sustainability -resources
Wouldn't rely solely on non-renewable resources
15 of 15
Other cards in this set
Card 2
Front
Other 4 economic objectives
Back
1) Stable exchange rate 2) Low government borrowing 3) Maintaining equality 4) Protecting the environment
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