SS (Lesson 2)

• there are several macroeconomic goals that a country strives to attain. Full employment, economic growth, and price stability are the fundamental ones
• economic growth is the most desired macroeconomic goal
• economic growth is defined as the rise in the nation’s productive capacity over a period of time
• full employment and price stability are manifestations of economic growth
• frictional employment is a phenomenon created when workers constantly move from one company to another in order to find a better job
• price stability develops when market prices, in general, hardly fluctuate
• a low inflation rate, aka creeping inflation, indicates price stability
• economic growth is authentic if the country’s productivity rate is higher than its population growth rate
• economic stagnation happens if economic growth is only as much as population growth
• economic retrogression takes place if population grows faster than the economy
• economic growth is a short term measure of economic performance
• economic development is economic growth sustained for a long period of time
• economic development is the sustained increase in real production
• national development covers all dimensions of the society or aspects of life of the people
• HDI focused on the three key dimensions and four indicators of human development
• three dimensions on HDI are health, education, and standard of living
• the four indicators of HDI are life expectancy at birth, mean years of schooling, expected years of schooling, and gross national income per capita
• Two factors that affect economic growth and development are economic and non-economic
• the primary economic factors are human resources, physical capital, natural resources, and technology
• non-economic factors include peace and order situation, political stability, geographical location, culture, and legal limitations