macro

benefits of economic growth

increase demand for labour -> lowered unemployment
higher wages -> higher standard of living 
greater profits for firms -> more investment
higher production -> more exports -> improve balance of payments
wages+employment rise -> more tax revenue
may be some environmental benefits

benefits of gdp

recognised and used worldwide
easy to make comparisons
can show if standard of living is going up or down

big mac index

the cost of a big mac, compared in different currencies. because goods can be over/undervalued in foreign exchange, bu this is comparing the same product

deflation

sustained period when the price level is falling. negative inflation

disinflation

slow inflation

drawbacks of economic growth

income inequality -> low skilled workers can't get high wages of highly-skilled
hihger wages = more responsibility -> stress
demand pull inflation
more imports -> balance of payments defecit
industrial expansion -> negative externalites
overexplotation (of natural resources)
unsustainable for generations

drawbacks of gdp

difficult to calculate
doesn't show the hidden economy
doesn't show transactions of second hand items, financial assets (stocks)
doesn't show the state of the environmental/negative externalities
doesn't show wealth disparities
doesn't show real standard of living (gov.t expenditure,benefits could be high)

drawbacks of human development index

life expectancy doesn't indicate a good or happy life
years in education doesn't show how well people learn what they are taught
using gni figures doesn't include the shadow economy, which is more prevalent in underdeveloped countries
HDI alone can't measure a country's equality,  wealth disparities etc.

economic growth

increase in productive potential of an economy

economic growth rate formula (as a %)

change in GDP / original GDP X 100

gdp

total value of all goods and services produced in a country in a year

gross

total before deductions

gross national income

gdp+net income from overseas eg. british citizens working in na different country but sending money back

human development index

measures social indicators:
-life expectancy
-average + expected years in school
-GNI per capita (using PPP)

<0.8 high human development
0.5-0.8 medium human development
>0.5 low human development

inflation

sustained rise in an economy's general price level

long run growth

increase in quality or quantity of factors of production

net 

a total after deductions

net primary income

net flow of profits, interest and investments & income from foreign workers eg, wages, salaries

net secondary income

transfers of money between countries eg. internation aid

nominal GDP

total value of all goods and services produced in an economy within a specific time period, measured at current prices. not accounting for inflation

other ways to measure development

UK national wellbeing assessment
world happiness index (self-reported life evaluation)
% of adult males working in agriculture (higher % = low economic development)
levels of disease and malnutrition

purchasing power parity

comparing all currencies to the us dollar to fairly measure what each one could actually purchase

real GDP

total value of goods and services produced within a country in a specific time period, adjusted for inflation

trend rate

average rate  of economic growth over a period of economic booms and slumps

value

total value of g/s produced in a year

volume

total amount of g/s produced in a year

wage price spiral

when people act on the inflation expectation and it becomes true

comsumer price index

a measure of inflation from the consumer’s perspective - how the price of a basket of goods changes year by year. excludes mortgage payments and council tax

cpi and rpi limitations

rpi excludes top 4% income households

cpi doesn’t include mortgage payments or council tax

Living Costs and Food Survey can be inaccurate

basket of goods changes yearly, can miss short term spending trends

rpi

shows how the cost of a basket of goods changes over time

economic integration

countries deepening economic relations over time eg in trade