Basic Economics
Balance of payment (page 161)
Visible and invisible trade:
Goods and services which are sold overseas are called EXPORTS. Those which are bought from other countries are called imports. Economies distinguish between visible trade and invisible trade.
Visible trade: buying and selling of physical goods
Invisible trade: exchange of services such as e-commerce and credit sales.
Balance of trade: visible exports - visible imports
Balance of payments: a BOP is a record of all transactions relating to international trade.
Current account: shows a value of all imports and exports over a period of time. Capital account: records flows of money into and out of a country resulting from transactions relating to savings investments and speculations.
Economic Growth
An increase in the capacity of an economy to produce goods and services, compared from one period of time to another. Economic growth can be measured in nominal terms, which include inflation, or in real terms, which are adjusted for inflation.
Economics growth refers to an increase in the real GDP or GNP per capita in a country in a given period of time. It can be shown by the outward movement of the PPC or any movement from inside the PPC to the curve.
There are two ways in which economic growth can happen:
1. A country have many people out of work and much capital and land not being used. If these resources are put to work GDP will increase. This is know as short run growth.
2. Even when all resources are fully employed. However, economic growth is still possible. Increases in the suppllies of labour and capital and increase in the efficiency with which economic resources are being used, will lead to increase in total output. This is known as long run growth
Features
1. Investment in human capital: education and training are often called
'investment in people' or 'human capital' . By improving the quality and quantity
of
Visible and invisible trade:
Goods and services which are sold overseas are called EXPORTS. Those which are bought from other countries are called imports. Economies distinguish between visible trade and invisible trade.
Visible trade: buying and selling of physical goods
Invisible trade: exchange of services such as e-commerce and credit sales.
Balance of trade: visible exports - visible imports
Balance of payments: a BOP is a record of all transactions relating to international trade.
Current account: shows a value of all imports and exports over a period of time. Capital account: records flows of money into and out of a country resulting from transactions relating to savings investments and speculations.
Economic Growth
An increase in the capacity of an economy to produce goods and services, compared from one period of time to another. Economic growth can be measured in nominal terms, which include inflation, or in real terms, which are adjusted for inflation.
Economics growth refers to an increase in the real GDP or GNP per capita in a country in a given period of time. It can be shown by the outward movement of the PPC or any movement from inside the PPC to the curve.
There are two ways in which economic growth can happen:
1. A country have many people out of work and much capital and land not being used. If these resources are put to work GDP will increase. This is know as short run growth.
2. Even when all resources are fully employed. However, economic growth is still possible. Increases in the suppllies of labour and capital and increase in the efficiency with which economic resources are being used, will lead to increase in total output. This is known as long run growth
Features
1. Investment in human capital: education and training are often called
'investment in people' or 'human capital' . By improving the quality and quantity
of