• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Explain what data might be employed in this assessment of economic health and discuss how useful it is likely to be

Extracts from this document...


The Chairman of a national bank stated "it is important to rely on a range of qualitative and quantitative data to assess the economic health of a nation." Explain what data might be employed in this assessment and discuss how useful it is likely to be. (25) (Oct/Nov 2007 Paper 4) To assess the economic health a vast range of data may be used. To judge economic health, in terms of macroeconomic performance, economists consider four main figures. These are: the economic growth rate, the unemployment rate, the inflation rate and the current account position. An economy may be considered to be healthy if its economic growth rate matches its trend growth rate, if its unemployment rate and its inflation rate are low and its current account position is in balance. ...read more.


Stable inflation is preferable to fluctuating inflation as it is easier for the government, firms and households to plan. A decline in a current account deficit caused by an improvement in international competitiveness is more beneficial than a reduction resulting from the economy entering a recession. The former might be more long lasting and may be accompanied by a rise in employment. A key aspect of the economic health of a nation is the living standards of its citizens. One common measure of living standards is real GDP per head. A high real GDP per head is usually assumed to indicate a high standard of living. There are, however, a number of limitations of this measure. For instance, if income is unevenly distributed, most people may not benefit from a high real GDP per head and the measure does not take into account a range of factors that affect living standards including leisure time and pollution. ...read more.


If an economy is doing well, consumer demand is likely to be increasing. This may lead to higher profit levels which, in turn, may increase net investment. A buoyant economy would also tend to encourage foreign firms to set up in the country and to attract foreign workers to move to the country. Of course, it is possible that rising profit levels may be the result of increased market concentration which in the long term may disadvantage consumers. Increasing FDI may be more the result of a downturn in the countries the firms are coming from and although a desire for improved living standards is the main motive for workers to emigrate, there other reasons including political persecution. There is no lack of data that can be employed to assess the economic health of a nation. Care, however, has to be taken in selecting and interpreting the information used. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Macroeconomics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Macroeconomics essays

  1. Quantitative and qualitative economic data

    The advantage of these quantitative data is that it allows comparison with other countries as well as historical comparisons in order to highlight trends and inform policy objectives.

  2. Budget 2004-05 and Economic Analysis of Pakistan

    This size is 12.1% higher than the size of budget estimates 2003-2004. * The resource availability during 2004-2005 has been estimated at Rs 842620 million against Rs 767298 million in the budget estimates of 2003-2004. * Net revenue receipts for 2004-2005 have been estimated at Rs 557165 million indicating an increase of 8.5% over the budget estimates of 2003-2004.

  1. Governments set economic objectives - Discuss the relative importance of each of these objectives ...

    An increase in the price level of finished manufactured imports [e.g. cars, televisions] will lead directly to an increase in the price level. An increase in the price of semi-manufactured goods and raw materials used as component parts of domestically produced goods will feed through indirectly to the price of domestically produced goods.

  2. Comparing the effects of immigration on GDP in Malaysia, Japan and South Africa.

    ( Please refer to attachment 2.0 as reference.) 3.2 Number of Immigrants, Unemployment and Crime Incidents Malaysia has been hosted about two millions of documented and undocumented immigrants. The decrease of number of foreign immigrants in year 2001 had

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work