ILO:
a) Rates of change of real Gross Domestic Product (GDP) as a measure of economic growth
b) Distinction between:
o real and nominal
o total and per capita
o value and volume
c) Other national income measures:
o Gross National Income (GNI)
d) Comparison of rates of growth between countries and over time
e) Understanding of Purchasing Power Parities (PPPs) and the use of PPP-adjusted figures in international comparisons
f) The limitations of using GDP to compare living standards between countries and over time
g) National happiness:
o UK national wellbeing
o The relationship between real incomes and subjective happiness
a) Rates of change of real Gross Domestic Product (GDP) as a measure of economic growth
b) Distinction between:
o real and nominal
o total and per capita
o value and volume
c) Other national income measures:
o Gross National Income (GNI)
d) Comparison of rates of growth between countries and over time
e) Understanding of Purchasing Power Parities (PPPs) and the use of PPP-adjusted figures in international comparisons
f) The limitations of using GDP to compare living standards between countries and over time
g) National happiness:
o UK national wellbeing
o The relationship between real incomes and subjective happiness
Starter: What we know so far and why is economic growth often considered the most important objective?
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What does GDP stand for?
Why is growth such an important objective? |
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Hans Rosling's 200 Countries, 200 Years, 4 Minutes - The Joy of Stats - BBC Four
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The collapse of Venezuela, explained
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National income measures:
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Explain what GDP is and how it is measured
(Read theory sheet)
What is GDP? | CNBC Explains
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Explain how GDP differs to GNI?
Why would this additional insight be important to know?
Difference between GDP and GNI I A Level and IB Economics
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Purchasing Power Parities
Why does the cost of living vary around the world and why is it important to take account of this is global comparisons?
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Top 10 Most Expensive Places to Live
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TWL #6: Big Mac Economics
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Purchasing Power Parity and the Big Mac Index I A Level and IB Economics
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Identify and explain what the different y axis mean and the limitations of some of these data sets?
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Limitations of using GDP
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FDI is considered to be a good method to increase growth and development in LDC. Explain why?
The Case Against Shell: 'The Hanging of Ken Saro-Wiwa Showed the True Cost of Oil'
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What limitations could be associated of using GDP. Consider the following :
GDP: An Imperfect Measure
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A healthy economy should be designed to thrive, not grow | Kate Raworth
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Theory:
The standard of living does not just refer to income but also to the quality of life and economic welfare. There are many problems with using GDP figures to compare living standards over time and between countries. For example:
• GDP does not take into account the improving quality of (in particular) technological goods.
• GDP does not include unofficial or unpaid work. The value of goods and services that are consumed by the producers, rather than traded, is also not included. This is a particular issue in developing countries with higher levels of subsistence agriculture.
The standard of living does not just refer to income but also to the quality of life and economic welfare. There are many problems with using GDP figures to compare living standards over time and between countries. For example:
• GDP does not take into account the improving quality of (in particular) technological goods.
• GDP does not include unofficial or unpaid work. The value of goods and services that are consumed by the producers, rather than traded, is also not included. This is a particular issue in developing countries with higher levels of subsistence agriculture.
• Increases in real GDP may not be shared equally among an economy's population: GDP per capita shows average income per person, but the averaging process may mask huge inequalities.
• There may be increases in other problems alongside economic growth. There may be more pollution, congestion, number of hours worked, stress levels – all these can contribute to worsening living standards even for those whose - incomes are rising.
• There may be increases in other problems alongside economic growth. There may be more pollution, congestion, number of hours worked, stress levels – all these can contribute to worsening living standards even for those whose - incomes are rising.
Additional reading:
Does GDP tell the whole economic story?
Does GDP tell the whole economic story?
National happiness
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How could you measure happiness?
How does your measure differ to GDP per capita? How does your measure differ to HDI? What issues are there with trying to measure this? Well-being interactive content The world's happiest countries |
Why Finland And Denmark Are Happier Than The U.S.
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UK national wellbeing
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What could be included when attempting to measure national well-being?
How can countries measure the well-being of their citizens?
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What limitations could be attached to focusing on happiness for Governments? (5 marks)
This Country Put Happiness Before Economy, But Did It Work?
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The relationship between real incomes and subjective happiness
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How much do you want to earn and why?
What would you be prepared to sacrifice for that income?
Would winning the lottery make you happier? - Raj Raghunathan
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Explain the relationship between real income and subjective happiness. (5 marks)
Subjective Happiness and the Easterlin Paradox
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Activity:
Devise a list (with explanations) of different policies which may directly help to increase the wellbeing and happiness of individuals in the UK. Do any of them conflict with the policy objective of increasing GDP?
http://qualifications.pearson.com/content/dam/pdf/A%20Level/economics-a/2015/teaching-materials/National-happiness-Theme-2.pdf
Devise a list (with explanations) of different policies which may directly help to increase the wellbeing and happiness of individuals in the UK. Do any of them conflict with the policy objective of increasing GDP?
http://qualifications.pearson.com/content/dam/pdf/A%20Level/economics-a/2015/teaching-materials/National-happiness-Theme-2.pdf