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4. The national and international economy
4.1 The measurement of macroeconomic performance
4.1.4 Uses of national income data
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National Income Data includes measures such as Gross Domestic Product (GDP) and Gross National Income
GNI
Comparing National Income Data per
capita
provides insights into differences in living standards across countries.
Steps in collecting National Income Data using surveys
1️⃣ Sampling
2️⃣ Data collection
3️⃣ Estimation
Administrative data is often more
readily
available but may lack certain information.
True
The key difference between GDP and GNI is that GDP focuses on production within a country's
borders
What does GDP per capita measure?
Average production per person
GDP per capita provides a better indication of a country's
standard of living
than total GDP alone.
True
National income data allows economists to track changes in a country's total output over
time
Match the macroeconomic variable with its definition:
GDP ↔️ Total value of production within borders
GNI ↔️ Total income earned by residents
Economic growth is measured by an increase in a country's Gross Domestic Product (GDP) over
time
GDP and GNI fully capture a country's standard of living and poverty levels.
False
GDP measures the total value of all goods and services produced within a country's
borders
National Income Data allows economists to track changes in a country's total
output
National Income Data helps assess the impact of government
policies
Surveys provide more
detailed
data but are resource-intensive.
True
Match the measure with its definition:
GDP ↔️ Total value of goods and services produced within a country
GNI ↔️ Total income earned by a country's residents
GDP per
capita
is used to compare living standards between countries.
Gross Domestic Product (GDP) measures the total value of all goods and services produced within a country's
borders
What are the two main examples of national income data measures?
GDP and GNI
Methods of collecting national income data
1️⃣ Surveys using sampling
2️⃣ Administrative data using statistical analysis
GNI provides a better measure of a
country's
economic well-being than GDP.
True
What is used to compare living standards between countries?
GDP per capita
What are the two main measures of national income?
GDP and GNI
What does GNI include that GDP does not?
Income from abroad
What type of economic activity is not captured by GDP or GNI?
Unpaid household work
What are the two main types of government fiscal policies?
Expansionary and contractionary
What is the primary goal of contractionary fiscal policy?
Control inflation
Match the fiscal policy with its economic effect:
Expansionary Fiscal Policy ↔️ Stimulates economic activity
Contractionary Fiscal Policy ↔️ Reduces inflation
Expansionary monetary policy lowers
interest rates
to increase economic activity.
True
What is a key limitation of using GDP and GNI to measure living standards?
They ignore income distribution
The Gini coefficient measures the
equality
of income distribution within a country.
True
How does national income data help in policy making?
Evaluates policy effectiveness
GDP focuses on production within a country's
borders
GDP focuses on production within a
country's
borders, while GNI focuses on income earned by a country's residents.
True
What is GDP per capita used to compare between countries?
Living standards
Poverty levels indicate the proportion of a population living below a defined poverty
line
Expansionary fiscal policy involves increasing government spending and/or
reducing
taxes.
True
Match the policy type with its economic effect:
Expansionary fiscal policy ↔️ Stimulates economic activity, increases GDP
Contractionary fiscal policy ↔️ Slows economic growth, reduces inflation
Expansionary monetary policy lowers interest rates to stimulate consumer spending and business
investment
High GDP always indicates a high standard of living for all residents.
False
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