econs
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2 (a) What are the indicators used to indicate the health of an economy? (10)
(b) How would you determine that people in one country are 'better off'
than those in another country? (15)
Part (a)
Defifne health of an economy
Link to macroeconomic goals of govt : stable price level/low inflation rate, full employment/low unemployment, Balance of Payments equilibrium and stable exchange rate, high and stable economic growth.
Explain (not just state) what indicators can be used to measure health of the economy.
- unemployment rate
- CPI
- economic growth figures
- Balance of Payments
Conclusion: Health of an economy is multi-faceted, should not be too hasty in concluding that economy is in poor health on basis of one indicator alone.
(b) How would you determine that people in one country are 'better off'
than those in another country? (15)
Define parameters of 'better off' material & non-material aspects.
Most accessible data NI statistics use of real income per capita. Explain how real income per capita is measured.
Show link between real income per capita and SOL...