Chapter 13:
Measuring the
performance of
the economy
CHAPTER OUTLINE
LEARNER OUTCOMES
INTRODUCTION
13.1 MACROECONOMICS OBJECTIVES
13.2
13.3
13.4
13.5
13.6
13.7
MEASURING THE LEVEL OF ECONOMIC ACTIVITY: GROSS DOMESTIC PRODUCT
OTHER MEASURES OF PRODUCTION, INCOME AND EXPENDITURE
MEASURING EMPLOYMENT AND UNEMPLOYMENT
MEASURING PRICES: THE CONSUMER PRICE INDEX
MEASURING THE LINKS WITH THE REST OF THE WORLD (BALANCE OF PAYMENTS)
MEASURING INEQUALITY: THE DISTRIBUTION OF INCOME
IMPORTANT CONCEPTS
NOTE: IT IS IMPORTANT THAT THE LEARNING OUTCOMES OF EACH CHAPTER IS STUDIED
AND UNDERSTOOD TOGETHER WITH THE STUDY GUIDE LEARNING OUTCOMES
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
LEARNER OUTCOMES
Once you have studied this chapter you should be able to
• explain the five main macroeconomic objectives
• explain what the national accounts represent
• define the most important national accounting concepts
• show how the basic national accounting concepts are linked
• define the unemployment rate
• define and interpret the consumer price index (CPI)
• explain the balance of payments
• explain a Lorenz curve and the Gini coefficient
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
INTRODUCTION
How is the economy performing?
What are our economic prospects?
Are things going to improve and, if so, when?
This leads the economist to ask….
What criteria should be used?
How can these criteria be quantified or measured?
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
LO: Explain the five main macroeconomic objectives
13.1 MACROECONOMICS OBJECTIVES
The five macroeconomic objectives
Economic
growth
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Full
employment
Price
stability
ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
Balance of
payments
stability
Equitable
distribution
of income
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are linked
13.2 MEASURING THE LEVEL
OF ECONOMIC ACTIVITY:
GROSS DOMESTIC PRODUCT
• The first step in measuring economic growth is to determine a country’s
total production of goods and services in a specific period.
• Performed by the national accounting sections of Statistics South Africa
(Stats SA) and the South African Reserve Bank (SARB).
• The central concept in the national accounts is the gross domestic product
(GDP).
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING THE LEVEL OF ECONOMIC
ACTIVITY: GDP
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are linked
Defining GDP
The gross1 domestic product is the total value2 of all final3 goods
and services produced within the boundaries of a country4 in a
particular period5 (usually one year).
1
Gross: No provision for depreciation, consumption of capital
2
Value: expressed in terms
3
Final goods and services: value added: to avoid double counting
4
Geographic aspect: within a country’s boundaries
5
CurrentClick
production:
during
a particular
period
on the corresponding
numbers
to examine the
elements of the definition
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING THE LEVEL OF ECONOMIC
ACTIVITY: GDP
Defining GDP
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are linked
GDP = C + I + G + (X – Z)
Investment
Exports
Imports
Consumption
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Government spending
ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING THE LEVEL OF ECONOMIC
ACTIVITY: GDP
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are linked
Three methods of calculating GDP
1
2
3
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Production method (value added)
Expenditure
(final
goods
and services)
Productionmethod
method
(value
added)
This method estimates GDP by adding up the contribution of each
Income
method
(income
of the
factors
ofservices)
production)
industry
to GDP.
To avoid
double
counting,
the contributions are
Expenditure
method
(final
goods
and
measured in terms of value added. Uses basic prices.
The
expenditure
method
estimates
GDPofbyproduction)
adding up all the
WhyIncome
do they
yield the
same answer?
method
(income
of
the factors
components of final demand. To avoid double counting only the
expenditure
on essentially
final estimates
goods measure
andGDP
services
(e.g
the
bread)
should
income
method
by
adding
up
all the
incomes
The The
three
methods
the
same
thing,
albeit
at be
considered.
Uses
market
prices.
(rent,
interest,
wages
& profits)
different
points
in
the
circular
flow.received by the FOP. Uses factor
cost.
ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING THE LEVEL OF ECONOMIC
ACTIVITY: GDP
Three methods of calculating GDP
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are linked
One of the major problems that national accountants
have to deal with is the problem of double counting.
An example
Add the totals of each
• A farmer produces 1 000 bags of wheat which he sells
sale:to a
miller at R10 per bag, yielding a total of R10 000.
R10 000
• The miller processes the wheat into flour, which he then
+ sells
R12 500
to a baker for R12 500.
+ R18 000
• After baking bread with the flour, the baker sells it to a+ shop
R21 000
for R18 000.
= R61 500
• The shop subsequently sells the bread to final consumers for
R21 000.
You need to consider the value
?
add for each transaction
• What is the value of these four transactions
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
Click on the question mark for more
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MEASURING THE LEVEL OF ECONOMIC
ACTIVITY: GDP
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are linked
What is the value add?
The amount by which the value of the firm’s products exceeds the
value of the goods and services the firm purchases from other
firms at each stage of production.
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING THE LEVEL OF ECONOMIC
ACTIVITY: GDP
Three methods of calculating GDP
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are linked
Let us look at each method:
1
Production method
Click on each letter to view the steps of
the example. Click again to hide
This method estimates GDP by adding up the contribution of each stage to
GDP.
Value added
A farmer
After
The
miller
shop
baking
produces
subsequently
processes
bread 1with
000
thesells
the
wheat
bags
flour,
the
ofinto
bread
wheat
theflour,
baker
to
A
B
C
D
E
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final it
which
sells
consumers
he
to athen
sells
shop
to
sells
for
for
a miller
to
R21
R18
a baker
000.
at R10
forper
R12
bag,
500.
yielding a total of R10 000.
Value added = R21
R12 000
R18
500 – R18
R10 000
R12
500
His value added
= R3
R2
R5
is R10
500 000
000
Calculate the total value added by adding up
the value added per stage
ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
R10 000
R2 500
R5 500
R3 000
R21 000
RESET
MEASURING THE LEVEL OF ECONOMIC
ACTIVITY: GDP
Three methods of calculating GDP
2
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are linked
Expenditure method
The expenditure method estimates GDP by adding up all the components
of final demand. This is the sum of the spending by households, firms, the
government and the ROW on final goods and services produced in the
domestic (SA) economy.
Or
The expenditure approach measures GDP as the sum of consumption
expenditure, investment, government purchases of goods and
services, and net exports.
GDP = C + I + G + (X – M)
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING THE LEVEL OF ECONOMIC
ACTIVITY: GDP
Three methods of calculating GDP
3
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are linked
Income method
The income method estimates GDP by adding up all the incomes (rent,
interest, wages and profits) received by the factors of production (land,
capital, labour and entrepreneurship) during the various stages of the
production process.
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING THE LEVEL OF ECONOMIC
ACTIVITY: GDP
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are linked
Measurement at market prices, basic prices and
factor cost (or income)
The three sets of prices that can be used to calculate GDP
1
Market prices
(used in expenditure method)
2
Basic prices
(used in production method)
3
Factor cost
(used in income method)
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING THE LEVEL OF ECONOMIC ACTIVITY:
GDP
Measurement at market prices, basic prices and
factor cost (or income)
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are
linked
• GDP at market prices
– taxes on products
+ subsidies on products
= GDP at basic prices
• GDP at factor cost (or income)
+ other taxes on production
– other subsidies on production
= GDP at basic prices
• GDP at basic prices
+ other subsidies on production
– other taxes on production
= GDP at factor cost (or income)
• GDP at basic prices
+ taxes on products
– subsidies on products
= GDP at market prices
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING THE LEVEL OF ECONOMIC
ACTIVITY: GDP
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are linked
Measurement at current prices and at
constant prices
• Measurement always first at current prices (nominal GDP)
• During inflation, adjustments for price increases required
− nominal GDP converted to real GDP
− use prices in a base year (constant prices)
• GDP at current prices = nominal GDP (reflects price changes)
Click on the triangle to reveal Table 13-2 GDP at current prices and constant
prices and nominal and real growth, 2000-2013. Click again to hide.
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING THE LEVEL OF ECONOMIC ACTIVITY:
GDP
Measurement at current prices and at constant prices
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are
linked
•
GDP at constant prices = real GDP (excludes price changes)
•
In base year:
Or
real GDP = nominal GDP
GDP at constant prices = GDP at current prices
See Box 13-1: Nominal values, real values and purchasing power
(Textbook page 239)
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are linked
13.3 OTHER MEASURES OF
PRODUCTION, INCOME AND
EXPENDITURE
Gross national income or gross national product
•
GDP: geographical concept; reflects what happened on SA soil, irrespective
of who created the product
•
We also want to know what happened to the economic position of South
Africans
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
OTHER MEASURES OF PRODUCTION, INCOME AND EXPENDITURE
Gross national income or gross national product
• GNI (= GNP)
=
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are
linked
GDP
all income earned in South Africa by foreign
factors of production
all income earned by South African factors
of production in the rest of the world
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
OTHER MEASURES OF PRODUCTION, INCOME
AND EXPENDITURE
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are linked
Expenditure on GDP
Let’s recap:
The elements of total spending
Three approaches
to four
calculating
the GDPof the economy
The
major sectors
Three
approaches
to calculating
the GDP (C)
•• consumption
expenditure
by
households
Households
•
Production
approach
investment
spending (or capital formation) by
The four major sectors
of
the
economy
• Firms
• Income
approach
firms
(I)
• Government
• Expenditure
approach
government
spending (G)
•
Foreign
sector
The elements of total spending
• expenditure on exports (X) minus expenditure
on imports (Z)
Click on the arrows for more information
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
OTHER MEASURES OF PRODUCTION, INCOME
AND EXPENDITURE
EXPENDITURE ON GDP CONTINUED
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are linked
GDP = expenditure on GDP
=C+I+G+X–Z
Table 13-3 Composition
of expenditure on GDP
in South Africa in 2013
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
OTHER MEASURES OF PRODUCTION, INCOME
AND EXPENDITURE
Expenditure on GDP
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are linked
Gross domestic expenditure (GDE)
GDP
= C+I+G+X–Z
= GDP at market prices
Gross domestic expenditure (GDE)
= total value of all spending in South Africa
= C+I+G
• Exports (X) excluded from GDE because expenditure occurs in the rest of
the world
• Imports (Z) included in GDE (ie not subtracted) because expenditure
occurs in SA
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
OTHER MEASURES OF PRODUCTION, INCOME
AND EXPENDITURE
LO: Explain what the national accounts represent
LO: Define the most important national accounting concepts
LO: Show how the basic national accounting concepts are linked
Relationship between GDE and GDP
• GDE = C + I + G
• GDP = C + I + G + X – Z
Thus: GDP = GDE + (X–Z)
If GDP > GDE, then X > Z (ie (X–Z) is positive)
If GDP < GDE, then Z > X (ie (X–Z) is negative)
Important point
The difference between domestic spending and domestic
production is reflected in the balance of payments.
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
LO: Define the unemployment rate
13.4 MEASURING EMPLOYMENT
AND UNEMPLOYMENT
number of unemployed persons
100
Unemployment rate = ——————————————— x ——
workforce (available workers)
1
Strict definition: only those who have looked for work but not found any
Expanded definition: everyone who desires employment and does not
have a job
See Box 13-3 The informal sector (Textbook page 245)
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
LO: Define and interpret the consumer price index (CPI)
13.5 MEASURING PRICES:
THE CONSUMER PRICE INDEX
Prices and purchasing power
Purchasing power: The real value of money; what amount of goods or
services can be bought with one unit of money.
See Box 13-4 Index numbers (Textbook page 247)
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING PRICES: THE CONSUMER PRICE INDEX
LO: Define and interpret the CPI
The consumer price index
• CPI = index of prices of representative basket of consumer goods
and services
•
Elements of CPI:
➢ basket
➢ weights
➢ base year
➢ formula
➢ price collection
• CPI serves as basis for measuring inflation
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING PRICES: THE CONSUMER PRICE INDEX
The consumer price index
LO: Define and interpret the CPI
Table 13-5 The
South African
consumer
price index (all
urban areas),
2012 and 2013
(December
2012 = 100),
seasonally
adjusted
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING PRICES: THE CONSUMER PRICE INDEX
LO: Define and interpret the CPI
Constructing a price index
By using the prices and the contents of the CPI basket it is possible to
calculate the CPI. The formula is:
Cost of basket in current period
*100
Cost of basket in base period
Furthermore, note that a major purpose of the CPI is to measure inflation.
The inflation rate is the percentage change in the price level from one
year to the next. The inflation formula is:
(CPI of this year - CPI of the previous year)
* 100
CPI of the previous year
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING PRICES: THE CONSUMER PRICE INDEX
LO: Define and interpret the CPI
Constructing a price index
See Box 13-5 Constructing a price index (Textbook page 247)
Lets work through the example in Box 13-5.
Year
Bread
Total cost
of basket
Qty (kg)
Price per
kilo
Total cost
of meat
Qty
(loaves)
Price per
loaf
Total cost
of bread
2012
4
R35
R140
10
R10
R100
R240
2013
4
R45
R180
10
R12
R120
R300
1
2
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Meat
Click on the numbers to reveal more information
Click again to hide
Total cost of basket in 2013 (current period)
Calculate the total price per basket for each year.X 100
Total cost of basket in 2012 (base period)
2012 = (4 X R35) + (10 X R10) = R140 + R100 = R240
300
100 =+125,0
2013 = (4 X R45) + (10 x R12) =X R180
R120 = R300
240
ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
25%
MEASURING PRICES: THE CONSUMER PRICE INDEX
LO: Define and interpret the CPI
Changes in purchasing power
Purchasing power: The real value of money; what amount of goods or
services can be bought with one unit of money.
See Box 13-6 Changes in purchasing power (textbook page 249)
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
LO: Explain the balance of payments
13.6 MEASURING THE LINKS WITH
THE REST OF THE WORLD
(BALANCE OF PAYMENTS)
• Summary of all transactions with the rest of the world
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING THE LINKS WITH THE REST IF THE WORLD:
BALANCE OF PAYMENTS
LO: Explain the balance of payments
Table 13-6 South Africa’s balance
of payments, 2012 and 2013
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING THE LINKS WITH THE REST IF THE WORLD:
BALANCE OF PAYMENTS
LO: Explain the balance of payments
Key elements
Current account
A record of all the sales of goods and services
Current account
Financial
to the restaccount
of the world (exports), all the purchases
A
allservices
international
transactions
assets
ofrecord
goods of
and
from the
rest of theinworld
Unrecorded transactions
Financial account
and
liabilities
all the
purely
financial
flowsand
in
(imports)
and (i.e.
all the
primary
income
receipts
All errors
omissions
that occur in compiling
Gold
and and
foreign
reserves
and
out of of
a country,
like purchases and sales of
payments
a country.
the individual
the balance
Assets
held oncomponents
reserve by a of
central
bank inof
assets
such(+)
as bonds and shares).
- Exports
Unrecorded transactions
payments.
Unrecorded
transactions ensure that
foreign currencies and gold
- Direct
investment
Imports
(–)
the balance of payments balances.
Portfolio
investment
Service receipts
(+)
Gold and other foreign- services
- Other
Serviceinvestment
payments (–)
- Income receipts (+)
- Income payments (–)
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
LO: Explain the Lorenz curve and the Gini coefficient
13.7 MEASURING INEQUALITY: THE
DISTRIBUTION OF INCOME
Three of the measures used to calculate:
1) Lorenz curve
2) Gini coefficient
3) Quantile ratio
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING INEQUALITY: THE DISTRIBUTION OF INCOME
LO: Explain the Lorenz curve and the Gini coefficient
1) Lorenz curve
The Lorenz curve is a simple graphic device which illustrates the
degree of inequality in the distribution of income (or any other
variable).
Constructing a Lorenz curve
Click on the animation icon and
work through the steps
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING INEQUALITY: THE DISTRIBUTION OF INCOME
2) Gini coefficient
LO: Explain the Lorenz curve and the Gini coefficient
Click on the triangle to work through the definition for
the Gini coefficient. Click again to hide.
Gini coefficient =
area of inequality shown in the Lorenz curve
Area of the right angled triangle
formed by the axis and the line of equality
RESET
Gini index
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Gini index = Gini coefficient x 100
ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING INEQUALITY: THE DISTRIBUTION OF INCOME
LO: Explain the Lorenz curve and the Gini coefficient
3) Quantile ratio
Quantile ratio =
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income received by the highest per cent of the population
income received by the highest per cent of the population
ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
MEASURING INEQUALITY: THE DISTRIBUTION OF INCOME
LO: Explain the Lorenz curve and the Gini coefficient
The distribution of income in South Africa
Gini
index
68
Gini
coefficient
0,68
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
IMPORTANT CONCEPTS
Economic growth
Full employment/unemployment
Price stability/inflation
Balance of payments (or external)
stability
Distribution of income
Gross domestic product (GDP)
Final and intermediate goods
Value added
Production method
Expenditure method
Income method
Market prices
Basic prices
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Factor cost
Current prices
Constant prices
Nominal GDP
Real GDP
Gross national income (GNI)
Net primary income payments
Consumption of fixed capital
Gross domestic expenditure (GDE)
Purchasing power
Specific index
General (composite) index
Consumer price index
Balance of payments
ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY
IMPORTANT CONCEPTS CONTINUED
Current account
Financial account
Trade balance
Direct investment
Portfolio investment
Other investment
Unrecorded transactions
Gold and other foreign reserves
Gross reserves
Net reserves
Lorenz curve
Gini coefficient
Gini index
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ECONOMICS FOR SOUTH AFRICAN STUDENTS
CHAPTER 13: MEASURING THE PERFORMANCE OF THE ECONOMY