All the factors that contribute to a person’s happiness and well living is called living standard Different measures GDP per head/ per capita The better measure is real GDP/ capita Divide real GDP by the total population Average income per …
Inflation A continued increase in general price level over time. Measured with Consumer Price Index (CPI) Identify the goods and services that a typical household purchases It’s called a basket of products The prices will be monitored based on retail …
Labor Force Economy’s working population All people of the age of working Who are able and willing to work. Dependent Population Not in labor force Depend on labor force for their requirements People in education Retired people Prisoners Mentally ill …
4.6.1 Definition of Economic Growth Economic Growth is the increase in the real output (GDP) of an economy over time. It represents an expansion in the productive capacity of the economy. Measured as the percentage change in real GDP (adjusted …
Supply side policy Increases supply Productivity increase Focuses on long-term economic growth Types of policies Investment in public sector Infrastructure improved Information and resources flow faster Education improved Vocational training improved Skills improved Health system improved so les workers are …
Money supply means how much money is available in the economy Money supply can be controlled by the government Interest rate The cost one has to pay for borrowing money Interest can be annual or monthly If a person lends …
3.5.1 Classification of Firms Firms can be classified based on: A. Sector of the Economy Primary Sector: Firms engaged in extraction of natural resources (e.g., farming, fishing, mining). Secondary Sector: Firms involved in manufacturing and construction (e.g., car manufacturers, textile …
Demand of FOPs Product’s demand High demand means more FOPs required so they will be met some way as well Factor availability If factors available easily, demand could go higher Price of factors Simple rule of law of demand Factor …
3.7.1 Definition of Costs of Production Costs of production refer to the expenses incurred by a firm when producing goods or services. These include both fixed and variable costs. 3.7.2 Calculation of Costs of Production Key Cost Terms and Definitions: …
Budget It is a forecast statement It shows where the government will get its revenues from Where the government will spend its revenues Generally, the focus is on a balanced budget Government Spending Public goods and services are with the …