CZ - Chap 7: National Income Accounting

What are the 4 Macroeconomic Aims? (Internal & External)

Internal

• Sustainable & Inclusive Economic Growth

• Full employment / Low rate of unemployment

• Price stability (low & stable inflation)

External

= Favourable Balance of Trade

Sustainable Economic Growth (definition)

Occurs when the economy is growing at strong and stable rate, without resulting in significant environmental degradation and resource depletion, particularly for future generations

Inclusive Economic Growth (definition)

Occurs when the economy grows at strong and stable rate without resulting in significant worsening of income/wealth inequality

National Income (definition)

Monetary value of flow of output of final goods & services produced in an economy over a period of time

Non-reported transactions (definition)

Transactions that generate goods and services that goes unreported, encompasses both legal & illegal activities

Non-marketed transactions (definition)

Transactions that generate goods and services but does not involve monetary exchange

Real GDP (definition)

The money value of all final g&s produced within territory adjusted for price changes (due to inflation or deflation)

Material Standard of Living (definition)

The quantity and quality of goods and services accruing to each person in the country

Non-Material Standard of Living (definition)

The qualitative aspects of living that are intangible

Gini coefficient (definition)

An inequality indicator which measures inequality of income distribution in a country