Micro and Macroeconomics HEAD START TO ALEVEL ECONOMICS

Micro and Macroeconomics HEAD START TO A-LEVEL ECONOMICS

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Measuring Economic Activity HEAD START TO A-LEVEL ECONOMICS

WHAT IS GROSS DOMESTIC PRODUCT? Gross domestic product measures the monetary value of a country’s output of goods and services. HEAD START TO A-LEVEL ECONOMICS

FARMING MANUFACTURING SERVICES QUARTERNARY HEAD START TO A-LEVEL ECONOMICS

INDUSTRIES AND SECTORS – SOME EXAMPLES q Primary Industries: q Secondary Industries: q Tertiary Industries: q Quaternary Industries: HEAD START TO A-LEVEL ECONOMICS

INDUSTRIES AND SECTORS – SOME EXAMPLES q Primary Industries: Mining, farming, forestry, energy q Secondary Industries: q Tertiary Industries: q Quaternary Industries: HEAD START TO A-LEVEL ECONOMICS

INDUSTRIES AND SECTORS – SOME EXAMPLES q Primary Industries: Mining, farming, forestry, energy q Secondary Industries: Manufacturing, construction q Tertiary Industries: q Quaternary Industries: HEAD START TO A-LEVEL ECONOMICS

INDUSTRIES AND SECTORS – SOME EXAMPLES q Primary Industries: Mining, farming, forestry, energy q Secondary Industries: Manufacturing, construction q Tertiary Industries: Travel, tourism, education, health q Quaternary Industries: HEAD START TO A-LEVEL ECONOMICS

INDUSTRIES AND SECTORS – SOME EXAMPLES q Primary Industries: Mining, farming, forestry, energy q Secondary Industries: Manufacturing, construction q Tertiary Industries: Travel, tourism, education, health q Quaternary Industries: Information tech, research HEAD START TO A-LEVEL ECONOMICS

Can you find 6 different sectors of the UK economy in this picture? HEAD START TO A-LEVEL ECONOMICS

1. Farming (e. g. beef farmers) 2. Food processing 3. Food retailing (Lidl) 4. Advertising / marketing 5. Housebuilding 6. Paving manufacturers HEAD START TO A-LEVEL ECONOMICS

WHAT SHARE OF GDP COMES FROM EACH OF THE MAIN UK INDUSTRIES? HEAD START TO A-LEVEL ECONOMICS

Percentage of UK GDP in 2019 Agriculture Accommodation Mining, energy, water Transport & storage Education Construction ICT Finance & insurance Health & Social Care Professional & scientific Manufacturing Whole and retail Other services Real estate 1 3 3 4 6 6 7 7 8 8 10 11 13 14 0 2 4 6 8 10 12 HEAD START TO A-LEVEL ECONOMICS 14 16

IS GROSS DOMESTIC PRODUCT STILL FIT FOR PURPOSE? q A big debate about some of the paradoxes of GDP (broken windows add to GDP) q Technological change makes interpreting GDP difficult – we book holidays online rather than use a travel agent, we search on Google but don’t pay a fee q There is a large informal economy – activity including voluntary work may not get measured. We see a lot of tax avoidance and evasion. q GDP was devised for an economy based on mass production, but we now live in a world of increased customization (e. g. 3 printing) offering intangible value HEAD START TO A-LEVEL ECONOMICS

Measuring Economic Activity HEAD START TO A-LEVEL ECONOMICS

The Changing World Economy HEAD START TO A-LEVEL ECONOMICS

Which countries have the largest economies in the world? HEAD START TO A-LEVEL ECONOMICS

COUNTRIES WITH LARGEST GDP IN 2019 ($s bn) 1, 630 1, 638 1, 731 1, 847 1, 989 2, 707 2, 744 2, 936 3, 863 5, 154 Korea Russia Canada Brazil Italy France United Kingdom India Germany Japan China United States 14, 140 21, 439 0 10, 000 20, 000 30, 000 HEAD START TO A-LEVEL ECONOMICS

Which countries have the highest per capita GDP? HEAD START TO A-LEVEL ECONOMICS

WHAT IS GROSS DOMESTIC PRODUCT PER CAPITA? GDP per capita measures national income per head of population. Measured by total GDP/resident population. HEAD START TO A-LEVEL ECONOMICS

Countries with the largest GDP per capita 2019, in US dollars ($) 120, 000 113, 196 100, 000 83, 717 80, 000 81, 152 77, 975 77, 771 69, 688 67, 037 65, 112 63, 987 60, 000 59, 795 53, 825 40, 000 20, 000 0 Luxembourg Switzerland Macao SAR Norway Ireland Qatar Iceland United States Singapore Denmark HEAD START TO A-LEVEL ECONOMICS Australia

Countries with the largest GDP per capita 2019, in US dollars ($) 120, 000 113, 196 100, 000 83, 717 80, 000 81, 152 77, 975 77, 771 69, 688 67, 037 65, 112 63, 987 60, 000 59, 795 53, 825 40, 000 20, 000 0 Luxembourg Switzerland Macao SAR Norway Ireland Qatar Iceland United States Singapore Denmark United Kingdom = $39, 507 HEAD START TO A-LEVEL ECONOMICS Australia

Which countries have the lowest per capita GDP? HEAD START TO A-LEVEL ECONOMICS

Countries with the lowest GDP per capita 2019, in US dollars ($) National income per capita (US dollars) in 2018 1, 600 1, 400 1, 200 1, 000 800 660 777 800 Central African Republic Congo (Democratic Republic of the) 912 1, 040 1, 154 1, 159 Mozambique Malawi 1, 381 1, 404 1, 433 Sierra Leone Madagascar Yemen 600 400 200 0 Burundi Niger Liberia HEAD START TO A-LEVEL ECONOMICS

Countries with the lowest GDP per capita 2019, in US dollars ($) National income per capita (US dollars) in 2018 1, 600 1, 400 1, 200 1, 000 800 660 777 800 Central African Republic Congo (Democratic Republic of the) 912 1, 040 1, 154 1, 159 Mozambique Malawi 1, 381 1, 404 1, 433 Sierra Leone Madagascar Yemen 600 400 200 0 Burundi Niger Liberia Check out the Human Development Report for more data HEAD START TO A-LEVEL ECONOMICS

How is the balance of world GDP changing? HEAD START TO A-LEVEL ECONOMICS

The Rise of China – the share of global gross domestic product coming from China has been rising over the years. China's share of global GDP (per cent, *2019 -2020 are forecasts) 25 20 15 15. 3 15. 9 16. 5 17. 1 2012 2013 2014 2015 17. 6 18. 2 18. 7 2016 2017 2018 19. 2 19. 7 2019* 2020* 10 5 0 HEAD START TO A-LEVEL ECONOMICS

THE SHARE OF GLOBAL GDP IN 2019 FROM SELECTED REGIONS 60 50 40 30 20 10 0 5. 64 59. 65 40. 35 16. 05 Emerging market and developing economies Advanced economies EU 8. 06 3. 05 7. 25 Middle East and Latin America / Central Asia Caribbean ASEAN-5 Africa Sub. Sahara HEAD START TO A-LEVEL ECONOMICS

THE SHARE OF GLOBAL GDP IN 2019 FROM SELECTED REGIONS 60 There has been a shift in output and investment towards faster-growing emerging market countries in recent years 50 40 30 20 10 0 5. 64 59. 65 40. 35 16. 05 Emerging market and developing economies Advanced economies EU 8. 06 3. 05 7. 25 Middle East and Latin America / Central Asia Caribbean ASEAN-5 Africa Sub. Sahara HEAD START TO A-LEVEL ECONOMICS

WHAT ARE EMERGING MARKET COUNTRIES? An emerging market economy is a developing nation that is becoming more engaged with global markets HEAD START TO A-LEVEL ECONOMICS

EXAMPLES OF EMERGING MARKET COUNTRIES q MEXICO q INDONESIA q TURKEY q BANGLADESH HEAD START TO A-LEVEL ECONOMICS

RESEARCH SUGGESTION Choose an emerging country that interests you and then find out about their main economic strengths and challenges at the present time. A farmer returning home after harvesting paddy from field. Bangladesh's economy remains largely dependent on Agriculture HEAD START TO A-LEVEL ECONOMICS

THE SHARE OF GLOBAL GDP IN 2019 FROM SELECTED REGIONS 60 50 ASEAN-5 comprises Malaysia, Singapore, Thailand, Indonesia and the Philippines 40 30 20 10 0 5. 64 59. 65 40. 35 16. 05 Emerging market and developing economies Advanced economies EU 8. 06 3. 05 7. 25 Middle East and Latin America / Central Asia Caribbean ASEAN-5 Africa Sub. Sahara HEAD START TO A-LEVEL ECONOMICS

THE SHARE OF GLOBAL GDP IN 2019 FROM SELECTED REGIONS 60 Only 3% of the world’s output of goods and services comes from sub Saharan Africa 50 40 30 20 10 0 5. 64 59. 65 40. 35 16. 05 Emerging market and developing economies Advanced economies EU 8. 06 3. 05 7. 25 Middle East and Latin America / Central Asia Caribbean ASEAN-5 Africa Sub. Sahara HEAD START TO A-LEVEL ECONOMICS

WHICH WERE THE FASTEST-GROWING COUNTRIES IN 2019? HEAD START TO A-LEVEL ECONOMICS

WHICH WERE THE FASTEST-GROWING COUNTRIES IN 2019? Countries with the highest % growth of gross domestic product (GDP) in 2019 Mongolia 6. 5 Vietnam 6. 5 Cambodia 7. 0 Nepal 7. 1 Ethiopia 7. 4 Ghana 7. 5 Côte d'Ivoire 7. 5 Bangladesh 7. 8 Rwanda 7. 8 6. 3 6. 5 6. 7 6. 9 7. 1 7. 3 7. 5 7. 7 HEAD START TO A-LEVEL ECONOMICS 7. 9

How bad will 2020 be for the world economy? HEAD START TO A-LEVEL ECONOMICS

Source: IMF World Economic Outlook, April 2020 HEAD START TO A-LEVEL ECONOMICS

World GDP per capita growth, annual % change, source: IMF 6. 00 4. 00 2. 00 0. 00 -2. 00 -4. 00 92 19 94 19 96 19 98 20 00 20 02 20 04 20 06 20 08 20 10 20 12 20 14 20 16 20 18 20 20 19 19 90 -6. 00 Source: IMF World Economic Outlook, April 2020 HEAD START TO A-LEVEL ECONOMICS

The Changing World Economy HEAD START TO A-LEVEL ECONOMICS