1. Macroeconomic Indicators
Uses of National Income Data

2. Terms - explain Gross Domestic Product (GDP)
Gross National Product (GNP)
National Income (NI)
Non-monetised sector
Purchasing Power Parity (PPP)
Human Development Index (HDI)
Human Poverty Index (HPI)
Measure of Domestic Progress (MDP)
Misery Index

3. Problems with the data GDP does not fully measure output
Non-monetised sector
Unpaid labour
DIY
Parenting
‘black’ economy
GDP does not account for quality

4. BBC-B Computer
£400 (£1200)
I-pad
£329

5. Problem with the data Distribution of income Value of Leisure
Externalities
What is produced
Defence or consumer goods?
Differences between countries
PPP
How accurately is the data collected?

7. Alternatives in measuring welfare (you need to know at least one of these!)
HDI
Standard of living (GDP per capita)
Life expectancy at birth, in years
Educational attainment (literacy and enrolment)
Maximum value =1, the closer the better.
Use ‘The Economist in Figures’ to research countries which differ in ‘performance’
Can you explain why they differ?

8. Alternatives in measuring welfare
HPI
Longevity
Knowledge
Economic provision
Social inclusion

9. Alternatives in measuring welfare
MDP
Social and environmental cost of growth
Crime
Family breakdown
Benefits of unpaid work
household labour
Measure of domestic progress

10. Alternatives in measuring welfare
Misery Index
Adding the unemployment rate to the rate of inflation
High unemployment and high inflation = higher economic and social costs

11. Sustainable Economic Growth
You need to know the issues
Resource depletion
Market mechanism
Higher prices
Greater efficiency in use
Greater supply (cost effective to research)
Investment in substitutes
Environmental damage
Global warming
Koyoto Protocol 1997; World Summit 2015
Developing countries exempt (China, India, USA!)

12. Index of Sustainable Economic Welfare
ISEW = personal consumption + public non-defensive expenditures - private defensive expenditures + capital formation + services from domestic labour - costs of environmental degradation - depreciation of natural capital

13. A recent EU survey reported that income per head was significantly lower in Greece and Portugal than in the Netherlands and Ireland. Evaluate the view that living standards must therefore be higher than those in Greece and Portugal (25 marks)