Exam code: 0455 & 0987
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Define real GDP per capita.
Real GDP per capita is the total value of goods and services produced in an economy, adjusted for inflation, divided by the population size. It shows the average wealth per person and is useful for comparing living standards between countries.
What is the main advantage of using real GDP per capita to compare countries?
The main advantage of using real GDP per capita is that it allows for a fairer comparison of living standards between countries by adjusting for both population size and inflation.
Nominal GDP measures the value of goods and services produced without adjusting for .
Nominal GDP measures the value of goods and services produced without adjusting for inflation.
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Define real GDP per capita.
Real GDP per capita is the total value of goods and services produced in an economy, adjusted for inflation, divided by the population size. It shows the average wealth per person and is useful for comparing living standards between countries.
What is the main advantage of using real GDP per capita to compare countries?
The main advantage of using real GDP per capita is that it allows for a fairer comparison of living standards between countries by adjusting for both population size and inflation.
Nominal GDP measures the value of goods and services produced without adjusting for .
Nominal GDP measures the value of goods and services produced without adjusting for inflation.
Describe one disadvantage of using real GDP per capita as a measure of living standards.
One disadvantage of using real GDP per capita is that it ignores income distribution, so it does not show how evenly income is shared among the population.
Define nominal GDP.
Nominal GDP is the total value of all goods and services produced in an economy in a year, not adjusted for inflation.
True or False?
Real GDP is always higher than nominal GDP if inflation is positive.
False.
If inflation is positive, real GDP is lower than nominal GDP because it has been adjusted down to account for inflation.
Define Human Development Index (HDI).
The Human Development Index (HDI) is a composite indicator that measures a country's level of development using health, education, and income.
The HDI gives _________ weighting to three indicators: health , education, and income.
The HDI gives equal weighting to three indicators: health, education, and income.
What does a country’s HDI score closer to 1 indicate?
An HDI score closer to 1 indicates a higher level of human development.
True or False?
The HDI takes income inequality into account when measuring development.
False.
The HDI does not account for income inequality, as it uses the mean GNI per capita, which does not show how income is distributed.
Define income inequality.
Income inequality is the unequal distribution of income among individuals or groups within a country.
How do education and skills affect income distribution within a country?
People with higher levels of education and in-demand skills tend to access better-paying jobs, leading to higher incomes compared to those with fewer skills.
What impact does inheritance and wealth ownership have on income inequality?
Inheritance and ownership of wealth allow some people to receive income from assets, such as land, property, or investments, which increases income inequality within a country.
How can government policy reduce income inequality?
Government policies such as progressive taxes and generous welfare systems can help reduce income inequality by redistributing income from higher earners to those in need.
True or False?
Discrimination in the labour market can contribute to income inequality within a country.
True.
Discrimination based on gender, ethnicity or other factors can limit job access or pay for certain groups, increasing income inequality.
How does the rural–urban divide affect income distribution?
People in rural areas often have less access to education and well-paid jobs compared to urban dwellers, resulting in lower incomes and higher income inequality.
Define living standards.
Living standards refer to the general well-being and quality of life experienced by individuals in a country or region.
How do natural resources influence living standards in a country?
Countries rich in natural resources can generate more income, improve public services, and raise living standards.
Why is access to healthcare and clean water important for living standards?
Access to healthcare and clean water is essential for a healthy life, productivity, and overall development, directly impacting living standards.
True or False?
A higher level of education and skills can boost both income and living standards.
True.
Education and skills increase productivity and job opportunities, which lead to higher incomes and better living standards.