Econ 4130 Review 1
Economics 4130
SP13 Midterm 1 Review
The exam will have 5, 10-point questions on it from the questions below.
1. List 2 data sources researchers use to estimate historical standards of living and explain what they can infer from these sources. List three indicators of economic development other than National Income measures (NI, GDP, or GNP, level, growth rate, or per capita) that are of interest to economists and explain what can be inferred from each of these indicators.
2 data sources: Censuses, surveys (population, demographic information, occupational distributions)&Tax records (production information, shipping information, exports and imports, wealth). 3 indicators: a. Average annual rate of inflation: Measure of government stability. Low rate of inflation shows that the government is not printing money for its own purposes (wars, palaces, lavish courts). b. Life expectancy at birth. (Unambiguous measure of welfare.) c. Adult literacy, both female and total: Adult literacy is a good human capital measure (productive capacity of a society). Negatively correlated with child labor. If kids are in school learning to read, then they are not in fields or factories, associated with more development economy.
2. Explain in detail 3 weaknesses of per capita GNP (or GDP) as a measure of economic well-being. Although this measure has the flaws you just listed (and others) it is the most oft-referenced statistic when considering standard of living differences across countries. Why?
Both of those measures have weakness in common. We discussed 4. Do it in detail. Cannot just answer these questions by just writing what is in the lecture outlines. Requires more detail than just filling in the banks. Two main reasons why discussed in lecture.
GDP per capita does not always translate as improvement of welfare because it does not capture all economically important activities. Illegal activities in black market are not reported for income
SP13 Midterm 1 Review
The exam will have 5, 10-point questions on it from the questions below.
1. List 2 data sources researchers use to estimate historical standards of living and explain what they can infer from these sources. List three indicators of economic development other than National Income measures (NI, GDP, or GNP, level, growth rate, or per capita) that are of interest to economists and explain what can be inferred from each of these indicators.
2 data sources: Censuses, surveys (population, demographic information, occupational distributions)&Tax records (production information, shipping information, exports and imports, wealth). 3 indicators: a. Average annual rate of inflation: Measure of government stability. Low rate of inflation shows that the government is not printing money for its own purposes (wars, palaces, lavish courts). b. Life expectancy at birth. (Unambiguous measure of welfare.) c. Adult literacy, both female and total: Adult literacy is a good human capital measure (productive capacity of a society). Negatively correlated with child labor. If kids are in school learning to read, then they are not in fields or factories, associated with more development economy.
2. Explain in detail 3 weaknesses of per capita GNP (or GDP) as a measure of economic well-being. Although this measure has the flaws you just listed (and others) it is the most oft-referenced statistic when considering standard of living differences across countries. Why?
Both of those measures have weakness in common. We discussed 4. Do it in detail. Cannot just answer these questions by just writing what is in the lecture outlines. Requires more detail than just filling in the banks. Two main reasons why discussed in lecture.
GDP per capita does not always translate as improvement of welfare because it does not capture all economically important activities. Illegal activities in black market are not reported for income