Macroecon New

Currently includes Cambridge 8.5, a mixture of explain questions and other concepts to remember.

Uses of national income statistics

• for developing policies

• for evaluating the success of current economic policies

• help make conclusions about standards of living and make comparisons over time

Explain why GDPGNI do not accurately measure the 'true' value of output

• do not include non-marketed output (such as subsistence farmer, own’s work, childcare, which is especially common in developing countries)

• do not record output sold in underground markets

• do not account for improvements in quality of goods and services

• do not consider negative externalities and undesirable byproducts of production

Explain why GDP/GNI do not accurately measure economic wellbeing

• do not make distinctions about the composition of output

• do not directly reflect all achievements in standards of living

• provide no information on the distribution of income and output

• do not reflect certain non-economic quality of life factors

OECD Better Life Index

• evaluates society based on “wellbeing in the present” and “resources for wellbeing in the future”

• “wellbeing in the present” is split into quality of life (8 indicators) and material conditions (3 indicators)

• factors are selected by member countries of the Organisation of Economic Co-operation and development (OECD)

Happiness Index

An index that is used to measure economic well-being of a population using several quality of life dimensions. Data is collected from the Gallup World Poll and using telephone surveys

Happy Planet Index

An index that combines four elements to show how efficiently residents of different countries are using environmental resources to lead long, happy lives. The elements are well-being, life expectancy, inequality of outcomes and ecological footprint.

Aggregate Demand

Planned spending on domestic goods and services at different average price  levels, per period of time. Consists of consumption, investment and  government expenditures plus net exports.