• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month
Page
  1. 1
    1
  2. 2
    2
  3. 3
    3
  4. 4
    4
  5. 5
    5
  6. 6
    6
  7. 7
    7
  8. 8
    8
  9. 9
    9
  10. 10
    10
  11. 11
    11
  12. 12
    12
  13. 13
    13
  14. 14
    14
  15. 15
    15
  16. 16
    16
  17. 17
    17
  18. 18
    18
  19. 19
    19
  20. 20
    20
  21. 21
    21
  22. 22
    22
  23. 23
    23
  24. 24
    24
  25. 25
    25
  26. 26
    26
  27. 27
    27
  28. 28
    28
  29. 29
    29
  30. 30
    30

Economics Assignment

Extracts from this document...

Introduction

Economics Standard Level Assignment Case Study, National income, Macroeconomics 5/19/2008 IB Economics SL Patrick Vollmer Outline of Content of this Package: 1. Case Study 2. Overhead- Introduction to Macroeconomics 3. Measuring National Income 4. Summary IB Economics Companion - p.147-157 5. The Good, The Bad & The Economist- p.304-325 6. National Economic Performance Sheets with questions 7. National Income Statistics 8. National Income Overhead 1) The Case Study - "rise of the Gulf" The article "Rise of the gulf" which is an extract of the magazine "the economist" is based on the condemnation and recommendation for the oil rich nations that are allocated at the Arabian Gulf. It portrays the path on which the Gulf nations rely too profoundly on their oil supplies and are founding their economy on the growth of the global oil market. The difficulty that occurs by this resource allocation is that changes in the value of a commodity (specifically oil) then directly affects the economy of the nation. Though oil is constant at present, oil cannot last forever and the great economical surplus that these oil rich nations have could disappear if oil where to decrease or finish. For most of the oil relying nations, the great prosperity has proven more of a irritation than a blessing as the large sums of capital have not been repretiated into the economy but rather kept for a selected small amount of individuals who have become tremendously wealthy. A major problem lay within the governments themselves, where they have taken all the spoils leaving the rest of the population with nothing. This unequal ditribution has the result that only a small amount of the population of the Gulf Countries have actually seen the wealth that the oil has generated. The Gulf has started to grow and learn from their mistakes, realising that a a more freemarket economy will benefit the society and that they need to repreiate into their economies. ...read more.

Middle

It also includes unrecorded activity that is legal but people are doing it illegally for example foreign workers without work permissions. It also includes work that is not recorded because people want to evade paying taxes, f.e cigarettes. High indirect and direct taxes, along with government health and safety regulations, give employers the incentive to avoid the official economy and hire workers unofficially. Percentage of hidden economy is measured in percentage of the GDP. Countries with higher tax burdens have a higher amount of hidden economic activity. * External costs: GDP figures do not take into account the costs of resource depletion. Cutting down trees leads to an increase in GDP, but there is no measure to account for the loss of these trees. * Other quality of life concerns: GDP may grow if people work longer and more. While people earn higher incomes as a result, they might not enjoy higher standards of living. GDP accounting does not include volunteer work * Composition of output: Large part of country's output might not benefit consumers, such as defense goods and capital goods. If this is the case, then it would be hard to argue that a higher GDP will raise standards of living. 5)The Good the Bad & the Economist 3.1 Measure National Income P.304-325 Economic activity in an economy is commonly measured by gross domestic product (GDP) and gross national product (GNP). Circular Flow of Income Assuming a 'two person economy' as above, we see that total expenditure equals income (in money terms) which equals output. As a result of how we define expenditure, income and output in national income accounting, the three flows resulting from the simple economic transaction above are per definition identities, i.e. E=O=Y. The Circular Flow in a simple two-sector economy Households and firms - no financial institutions, government or other countries exist. The flows involved are shown in figure 3.1.1. ...read more.

Conclusion

* It does not take account of what is produced - one economy might be producing capital goods, which involves less consumption now but should lead to more future income; another might be producing consumption goods which involves high levels of consumption today but less in the future. * There are problems comparing over time, e.g. the price of videos and personal computers has gone down over the years. This might reduce the value of national income, even though the quality of the goods and the number of features has improved * Economic "bads" can increase the figure even though the 'quality of life' has fallen, e.g. a traffic jam causes more consumption of petrol and increases output and income of the country. * Valuation problems, e.g. some output such as defense or the health service does not have market price; the value of these services is assumed to be the cost of providing them, which may over or under-value them * The quality of life: if we take longer holidays or work fewer hours, output and income may fall but we may enjoy life more; similarly, tougher restrictions on pollution might reduce output but increase the quality of our lives Other indicators of standard of living Given the problems using national income figures to compare standards of living between countries or over time some commentators use other indicators, such as number of doctors per 100 populations, adult literacy, and life expectancy. Net Economic Welfare (Tobin and Nordhaus) Measure of economic welfare; adjusts GNP by deducting economic 'bads' (e.g. pollution) and adding value of non-marketed activities (such as barter) and the value of leisure. Lorenz curve This illustrates the distribution of incomes in an economy, e.g. in the diagram 30%of the families in the country have only 15% of the income. The gini coefficient measures the income equality by measuring the area between absolute equality and the line of actual distribution of income. The bigger this area, the more unequal the distribution. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Economics 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 International Baccalaureate Economics essays

  1. Economics Assignment Methods of Calculating National Income

    for the various factors of production and will lead to $100 worth of spending (expenditure method). * If people do not buy some, firms end up with stocks of unsold goods which are included in investment and assumes the firms 'bought' the goods for themselves.

  2. Extended Essay Economics

    I was told that this was not at all the case and that due to competitors; the firm really didn't have much influence when setting their prices. This also fits into another aspect of an oligopoly. In an oligopoly, a firm has limited control over product price because of mutual interdependence (assuming there is no collusion between firms.)

  1. GPD countries

    For example, Thailand with GDP PPP $522 bn has an unemployment rate 1.4%. Saudi Arabia with similar GDP PPP ($546 bn) has 13% unemployment rate. GDP does not measure the security from crime. For example, two countries with similar GDP PPP - Lithuania and Oman - have completely different homicide rates.

  2. Growth and Development Problem Set - IB Economics exam questions and answers.

    So, clearly population growth does not definitely hamper the economic growth, if maintaining a moderate growth rate, it can encourage the economic growth as well. Moreover, different population policy, age structure and growth speed will eventually influence economic growth rates between countries.

  1. The Economics of Housing. Factors affecting prices and demand.

    In December the price changes to �184,459 in all UK and �352,278 in Greater London. So the change of house prices trend was upwards in 2007. Year 2008: From the graph figure we see that, there is a small increase in house price in the beginning of year 2008 then it starts decreases.

  2. What has happened to Canada's demographic over the past 50 years? What are ...

    Intentional Ageism Has to do with behaviours or practices that are intentionally and knowingly discriminatory, or biased, against older workers. Unintentional Ageism Occurs when an individual unknowingly, or accidentally, engages in a discriminatory act against an older worker in the place of employment.

  1. Use a diagram to show the consequences of government imposing a price above or ...

    There are also cases in which people give their houses to their children, their children give it to their children, and so on. This again, decreases the supply of rents. As time passes and the landlord wants to renew the houses, those people who have stayed in the houses would

  2. Explain how interdependence and uncertainty affect the behavior of firms in the oligopolistic market

    In turn there are also factors, which could be reasons for cartels break-downs. So if there is a falling demand and successful entry of non-cartel firms into the industry, the exposure of illegal price fixing by market regulators and if there are enforcement problems, it is very likely that cartels won?t exist for a long time period.

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