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increase. Economic growth is usually measured using Real GDP, which removes inflation to show changes in actual output."},{"text":"GDP per capita.","correct":false,"explanation":"GDP per capita adjusts GDP for population and helps compare average living standards, but economic growth itself is usually measured by growth in Real GDP."},{"text":"Real income.","correct":false,"explanation":"Real income measures inflation-adjusted purchasing power rather than the economy’s total output. Economic growth is conventionally measured by the increase in Real GDP."}]},{"id":"eaba2ef8-3e1d-4650-abf6-a461a2e66b57","cardType":"cloze","points":null,"front":"Growth is about [ ]; development is about [ ].","back":"Growth is about producing more; development is about people living better.","mcqOptions":[{"text":"Growth is about producing more; development is about people living better.","correct":true,"explanation":"Economic growth means increasing the economy’s output, while development is broader and concerns improvements in people’s welfare, opportunities and quality of life."},{"text":"Growth is about producing less; development is about people living better.","correct":false,"explanation":"Producing less indicates economic contraction, not growth. Growth means producing more, while development means improving people’s welfare and quality of life."},{"text":"Growth is about producing more; development is about firms earning more.","correct":false,"explanation":"Higher profits may accompany development but do not define it. Growth concerns producing more, whereas development concerns people living better through broader improvements in welfare."},{"text":"Growth is about consuming more; development is about prices rising faster.","correct":false,"explanation":"Consumption growth and inflation do not define these concepts. Growth is about producing more, while development is about improvements that enable people to live better."}]},{"id":"99d557a2-58ca-4627-afdc-d004106dc175","cardType":"basic","points":1,"front":"What does using real GDP remove from growth comparisons?","back":"Inflation / price rises.","mcqOptions":[{"text":"Inflation / price rises.","correct":true,"explanation":"Real GDP values output using constant prices, removing the effect of inflation so that changes represent differences in the actual volume of production."},{"text":"Population growth / demographic change.","correct":false,"explanation":"Real GDP is not adjusted for changes in population. It removes inflation or price rises; GDP per capita is used to account for population size."},{"text":"Income inequality / distributional differences.","correct":false,"explanation":"Real GDP does not show how income is distributed between people. It removes inflation or price rises from comparisons to reveal changes in actual output."},{"text":"Exchange rates / currency movements.","correct":false,"explanation":"Real GDP does not automatically remove exchange-rate changes. The adjustment from nominal to real GDP specifically removes inflation or changes in the general price level."}]},{"id":"ca27c0c3-2a35-4edc-a57a-0072a68ef04b","cardType":"basic","points":2,"front":"Why use GDP per capita in development comparisons?","back":"It accounts for population size.","mcqOptions":[{"text":"It accounts for population size.","correct":true,"explanation":"Dividing GDP by the population gives output per person, allowing economies with different population sizes to be compared more meaningfully."},{"text":"It accounts for inflation rates.","correct":false,"explanation":"Using real rather than nominal GDP accounts for inflation. GDP per capita instead accounts for population size by dividing total GDP by the number of people."},{"text":"It accounts for income inequality.","correct":false,"explanation":"GDP per capita is an average and does not reveal income inequality. Its purpose is to account for population size when comparing economies."},{"text":"It accounts for exchange rates.","correct":false,"explanation":"Currency conversion or purchasing power parity adjustments account for exchange-rate differences. GDP per capita specifically accounts for population size by expressing GDP per person."}]},{"id":"dad70233-6a27-4370-bac4-5cbbdcf79554","cardType":"cloze","points":null,"front":"GDP per capita equals [ ] divided by [ ].","back":"GDP per capita equals GDP divided by population.","mcqOptions":[{"text":"GDP per capita equals GDP divided by population.","correct":true,"explanation":"GDP per capita is calculated by dividing an economy’s total gross domestic product by its population, giving the average output or income per person."},{"text":"GDP per capita equals GNP divided by population.","correct":false,"explanation":"Using GNP would calculate GNP per capita, which includes net income from abroad. GDP per capita is GDP divided by population."},{"text":"GDP per capita equals GDP divided by labour force.","correct":false,"explanation":"Dividing by the labour force would measure output per worker or labour-force member. GDP per capita divides GDP by the entire population."},{"text":"GDP per capita equals population divided by GDP.","correct":false,"explanation":"This reverses the calculation and gives people per unit of output. GDP per capita is found by dividing GDP by population."}]},{"id":"8eae16f3-f363-4022-9203-c101694152b2","cardType":"basic","points":2,"front":"What happens to GDP per capita if population grows faster than total GDP?","back":"GDP per capita falls.","mcqOptions":[{"text":"GDP per capita falls.","correct":true,"explanation":"When population rises faster than total GDP, output is spread across more people, so the average amount of GDP per person decreases."},{"text":"GDP per capita rises.","correct":false,"explanation":"A rise would require total GDP to grow faster than population. If population grows faster, GDP is spread across more people and GDP per capita falls."},{"text":"GDP per capita stays unchanged.","correct":false,"explanation":"GDP per capita remains unchanged only when GDP and population grow at the same rate. Faster population growth causes GDP per capita to fall."},{"text":"GDP per capita becomes zero.","correct":false,"explanation":"Faster population growth reduces GDP per capita but does not make it zero unless total GDP itself is zero. The correct result is that GDP per capita falls."}]},{"id":"5c9ca177-ebfb-4d8a-939f-ebefd4260e56","cardType":"basic","points":2,"front":"Why can GDP per capita mislead about inequality?","back":"It is an average, so gains may go to elites.","mcqOptions":[{"text":"It is an average, so gains may go to elites.","correct":true,"explanation":"GDP per capita divides total GDP equally across the population statistically, so it can rise even when most additional income is received by a small elite."},{"text":"It is a median, so gains are evenly shared.","correct":false,"explanation":"GDP per capita is a mean average, not a median, and does not imply equal sharing. It can hide inequality because gains may go mainly to elites."},{"text":"It is a price index, so it excludes real output.","correct":false,"explanation":"GDP per capita measures average output or income per person, not the price level. It can mislead about inequality because an average hides who receives the gains."},{"text":"It is a poverty measure, so it only counts low incomes.","correct":false,"explanation":"GDP per capita covers the whole economy rather than only low-income households. Its average can conceal inequality when economic gains accrue mainly to elites."}]},{"id":"482fe26e-9e4a-4763-a724-166c99c3984c","cardType":"basic","points":1,"front":"What type of activity can GDP under-record in developing economies?","back":"Informal economic activity.","mcqOptions":[{"text":"Informal economic activity.","correct":true,"explanation":"Unregistered, unpaid or cash-based informal activity may not appear in official records, so GDP can understate production in economies where this sector is large."},{"text":"Formal economic activity.","correct":false,"explanation":"Formal activity is registered and documented, making it more likely to be included in official GDP data. Informal economic activity is more commonly under-recorded."},{"text":"Public-sector economic activity.","correct":false,"explanation":"Government spending, wages and services are recorded through official accounts and included in GDP estimates. Informal economic activity is more likely to be missed."},{"text":"Export-based economic activity.","correct":false,"explanation":"Exports pass through firms, customs and financial records, so they are generally captured in GDP. Informal economic activity often lacks documentation and is under-recorded."}]},{"id":"3d1e7ece-a8e6-4caa-a09b-b1f989d34872","cardType":"cloze","points":null,"front":"GDP measures output produced [ ]; GNP measures output produced by [ ].","back":"GDP measures output produced inside the country; GNP measures output produced by residents or firms.","mcqOptions":[{"text":"GDP measures output produced inside the country; GNP measures output produced by residents or firms.","correct":true,"explanation":"GDP follows the location of production, whereas GNP follows ownership or residency by including residents’ overseas production and excluding production attributable to non-residents."},{"text":"GDP measures output produced by residents or firms; GNP measures output produced by inside the country.","correct":false,"explanation":"This reverses the two concepts. GDP measures production inside national borders, while GNP measures production attributable to the country’s residents or firms, wherever it occurs."},{"text":"GDP measures output produced outside the country; GNP measures output produced by residents or firms.","correct":false,"explanation":"GDP includes domestic production rather than production outside the country. GNP instead follows the output generated by residents or firms at home and abroad."},{"text":"GDP measures output produced inside the country; GNP measures output produced by foreign-owned firms.","correct":false,"explanation":"GNP is based on residents or domestically owned firms, not foreign-owned firms. GDP is the measure that includes all production occurring inside the country."}]},{"id":"c7f21c69-49fc-440b-8f54-3c7e46f20995","cardType":"basic","points":2,"front":"Why can GDP exaggerate income available to residents in some economies?","back":"Multinational profits may be sent abroad.","mcqOptions":[{"text":"Multinational profits may be sent abroad.","correct":true,"explanation":"GDP records output produced within national borders even when its profits accrue to overseas owners, so it can overstate the income that residents actually retain."},{"text":"All imports may be counted as domestic output.","correct":false,"explanation":"Imports are subtracted when expenditure GDP is calculated, rather than added to domestic output. GDP can exaggerate residents’ income when multinational profits are remitted abroad."},{"text":"Residents’ overseas earnings may be excluded.","correct":false,"explanation":"Excluding residents’ overseas earnings would tend to understate their income rather than explain an exaggeration. The overstatement arises when multinational profits generated domestically are sent abroad."},{"text":"Domestic wages may be converted using PPP rates.","correct":false,"explanation":"Unadjusted GDP is not calculated by converting domestic wages using PPP rates. The relevant issue is that profits included in domestic GDP may be transferred overseas."}]},{"id":"cd048547-8d74-4da5-a38e-c8b1e6286735","cardType":"basic","points":2,"front":"When may GNI or GNP better reflect living standards than GDP?","back":"When residents receive large income flows from abroad.","mcqOptions":[{"text":"When residents receive large income flows from abroad.","correct":true,"explanation":"GNI and GNP include net income received by residents from overseas, so they can capture resources supporting living standards that domestic GDP excludes."},{"text":"When domestic businesses produce large amounts within national borders.","correct":false,"explanation":"Production by domestic businesses within national borders is already included in GDP as well as GNI or GNP. Large income flows received from abroad create the important difference."},{"text":"When residents experience rapid increases in domestic prices.","correct":false,"explanation":"Inflation affects the real value of both GDP and GNI, so a price index is needed instead. GNI is especially useful when residents receive substantial income from abroad."},{"text":"When the country has a large population and workforce.","correct":false,"explanation":"Population size makes per-capita measurement important, but it does not itself favour GNI over GDP. GNI may be preferable when residents receive large overseas income flows."}]},{"id":"5324ceaf-51ea-4d4a-8228-b02bd79730c7","cardType":"basic","points":2,"front":"Why are PPP adjustments used in international income comparisons?","back":"They reflect local purchasing power by allowing for price differences.","mcqOptions":[{"text":"They reflect local purchasing power by allowing for price differences.","correct":true,"explanation":"Identical sums of money buy different quantities in countries with different price levels. PPP adjustments therefore compare incomes according to their local purchasing power."},{"text":"They reflect export competitiveness by allowing for trade differences.","correct":false,"explanation":"PPP does not measure export competitiveness or adjust for export volumes. It reflects local purchasing power by correcting income comparisons for differences in price levels."},{"text":"They reflect local income equality by allowing for wealth differences.","correct":false,"explanation":"PPP does not show how evenly income is distributed, so separate inequality measures are required. It adjusts for price differences to represent local purchasing power."},{"text":"They reflect domestic output levels by allowing for population differences.","correct":false,"explanation":"Population differences are handled by using per-capita figures, not PPP adjustments. PPP allows for different price levels so that local purchasing power can be compared."}]},{"id":"cf4b54dc-6a8f-4db4-ab32-3652244e92c1","cardType":"cloze","points":null,"front":"With a low cost of living, PPP-adjusted income is usually [ ] than market exchange-rate income.","back":"With a low cost of living, PPP-adjusted income is usually higher than market exchange-rate income.","mcqOptions":[{"text":"higher","correct":true,"explanation":"A given market-exchange-rate income buys more goods and services where prices are low, so its PPP-adjusted value is usually higher."},{"text":"lower","correct":false,"explanation":"This reverses the effect of low prices. Greater purchasing power means that income converted using PPP is usually higher than income converted at market exchange rates."},{"text":"equal","correct":false,"explanation":"Equality would imply that local prices align with those underlying the market conversion. A low cost of living instead makes PPP-adjusted income usually higher."},{"text":"more volatile","correct":false,"explanation":"PPP adjustment concerns the amount income can buy, not how much it fluctuates. Low local prices generally make PPP-adjusted income higher than the market-rate figure."}]},{"id":"1fa8710a-aff0-4ce0-b9b3-0351cddefec2","cardType":"basic","points":3,"front":"Which three dimensions does HDI combine?","back":"

Health
Education
Income

","mcqOptions":[{"text":"

Health
Education
Income

","correct":true,"explanation":"HDI broadens development measurement beyond income by combining health, education and income indicators into a single composite index."},{"text":"

Health
Employment
Income

","correct":false,"explanation":"Employment can affect living standards, but it is not one of HDI’s three dimensions. The index combines health, education and income."},{"text":"

Health
Education
Political freedom

","correct":false,"explanation":"Political freedom may be relevant to wider development, but it is not directly included in HDI. Its three dimensions are health, education and income."},{"text":"

Population
Education
Income

","correct":false,"explanation":"Population is used to produce per-capita measures but is not itself an HDI dimension. HDI combines health, education and income."}]},{"id":"c1acd6a8-c70c-4779-8451-d78799bc0912","cardType":"cloze","points":null,"front":"In HDI, health is measured by [ ], and income by [ ].","back":"In HDI, health is measured by life expectancy at birth, and income by PPP-adjusted GNI per capita.","mcqOptions":[{"text":"In HDI, health is measured by life expectancy at birth, and income by PPP-adjusted GNI per capita.","correct":true,"explanation":"HDI represents health through expected lifespan at birth and measures material living standards using GNI per person adjusted for international differences in purchasing power."},{"text":"In HDI, health is measured by infant mortality rate, and income by nominal GDP per capita.","correct":false,"explanation":"Infant mortality is a useful health indicator, while nominal GDP measures domestic output without adjusting for prices or foreign income. HDI uses life expectancy and PPP-adjusted GNI per capita."},{"text":"In HDI, health is measured by life expectancy at birth, and income by PPP-adjusted GDP per capita.","correct":false,"explanation":"HDI uses GNI because it follows residents’ income rather than only domestic production. Its income indicator is PPP-adjusted GNI per capita, alongside life expectancy for health."},{"text":"In HDI, health is measured by adult literacy rate, and income by PPP-adjusted GNI per capita.","correct":false,"explanation":"Adult literacy contributes to HDI’s education dimension, not its health dimension. Health is measured by life expectancy at birth, while income uses PPP-adjusted GNI per capita."}]},{"id":"b097b6dd-8f8c-4144-a3f8-f8441793acc6","cardType":"basic","points":2,"front":"Why might HDI rank a lower-income country above a richer one?","back":"Better health and education can outweigh lower income.","mcqOptions":[{"text":"Better health and education can outweigh lower income.","correct":true,"explanation":"HDI gives weight to longevity and educational outcomes as well as income. Stronger health and education can therefore compensate for a lower income score."},{"text":"Higher exports and imports can outweigh lower income.","correct":false,"explanation":"Trade volumes are not dimensions of HDI. A lower-income country can rank higher when its health and education outcomes are sufficiently better."},{"text":"A larger population and workforce can outweigh lower income.","correct":false,"explanation":"HDI uses per-capita income, so a larger population or workforce does not directly raise its score. Better health and education can outweigh lower income."},{"text":"Lower inflation and unemployment can outweigh lower income.","correct":false,"explanation":"Inflation and unemployment are economically important but are not direct HDI dimensions. Superior health and education outcomes can compensate for lower income."}]},{"id":"2b31a1ee-42cd-4573-a617-6b86b04bcb93","cardType":"basic","points":1,"front":"What limitation follows from HDI being an average?","back":"It can hide inequality.","mcqOptions":[{"text":"It can hide inequality.","correct":true,"explanation":"HDI combines national averages for health, education and income, so large differences between regions or social groups can disappear behind a single national score."},{"text":"It can exclude health outcomes.","correct":false,"explanation":"Health is included through life expectancy, so HDI does not exclude health outcomes. Its use of averages can instead conceal unequal outcomes between people and groups."},{"text":"It can measure only income.","correct":false,"explanation":"HDI includes life expectancy and education as well as income, so it is not an income-only measure. The limitation of averaging is that inequality can be hidden."},{"text":"It can ignore education entirely.","correct":false,"explanation":"Education is explicitly included through schooling indicators, so it is not ignored. Because the components are averaged nationally, unequal access and outcomes may be concealed."}]},{"id":"ab079e94-d42b-4a0b-b6c0-bb25029dafe3","cardType":"basic","points":2,"front":"What sector shift often suggests economic development?","back":"From primary dependence towards manufacturing and services.","mcqOptions":[{"text":"From primary dependence towards manufacturing and services.","correct":true,"explanation":"Development commonly involves structural change as labour and output move from agriculture and extraction towards higher-productivity manufacturing and an expanding range of services."},{"text":"From manufacturing and services towards primary dependence.","correct":false,"explanation":"This reverses the usual pattern of structural transformation. Economic development generally reduces dependence on primary activities while increasing the importance of manufacturing and services."},{"text":"From secondary dependence towards subsistence agriculture.","correct":false,"explanation":"A shift towards subsistence agriculture usually indicates lower productivity and limited specialisation. Development more often moves economies away from primary dependence towards manufacturing and services."},{"text":"From services dependence towards resource extraction.","correct":false,"explanation":"Greater reliance on resource extraction increases primary-sector dependence rather than demonstrating broad development. The typical shift is towards manufacturing and a diverse service sector."}]},{"id":"a085b97b-ec35-4924-88af-fafdc61b4ced","cardType":"cloze","points":null,"front":"The secondary sector is [ ]; the tertiary sector is [ ].","back":"The secondary sector is manufacturing and construction; the tertiary sector is services.","mcqOptions":[{"text":"The secondary sector is manufacturing and construction; the tertiary sector is services.","correct":true,"explanation":"The secondary sector transforms raw materials or builds structures, while the tertiary sector provides services to consumers and businesses rather than producing physical goods."},{"text":"The secondary sector is agriculture and extraction; the tertiary sector is services.","correct":false,"explanation":"Agriculture and extraction belong to the primary sector because they obtain raw materials. The secondary sector consists of manufacturing and construction, while services form the tertiary sector."},{"text":"The secondary sector is manufacturing and construction; the tertiary sector is agriculture and extraction.","correct":false,"explanation":"The secondary classification is correct, but agriculture and extraction are primary activities, not tertiary ones. The tertiary sector consists of services."},{"text":"The secondary sector is services; the tertiary sector is manufacturing and construction.","correct":false,"explanation":"This swaps the two sectors. Manufacturing and construction form the secondary sector because they produce goods, while services make up the tertiary sector."}]},{"id":"cbd912d9-501c-487c-9cd2-2e064c5b4a47","cardType":"basic","points":2,"front":"Why can a large service sector mislead as a development indicator?","back":"It may be low-paid informal work, not high-value services.","mcqOptions":[{"text":"It may be low-paid informal work, not high-value services.","correct":true,"explanation":"A large service-sector share does not guarantee high productivity or living standards because many workers may be in insecure, low-paid and unregistered informal activities."},{"text":"It may be high-paid formal work, not low-value services.","correct":false,"explanation":"High-paid formal services would generally strengthen, rather than undermine, the sector’s value as a development indicator. The misleading growth may instead consist of low-paid informal work."},{"text":"It may be subsistence agriculture, not high-value services.","correct":false,"explanation":"Subsistence agriculture belongs to the primary sector, so it cannot explain an unusually large service sector. The concern is that recorded services may be low-paid informal work."},{"text":"It may be capital-intensive manufacturing, not high-value services.","correct":false,"explanation":"Manufacturing belongs to the secondary sector, so this confuses sector classifications. A service sector can mislead when much of it consists of low-paid informal work."}]},{"id":"fad10c71-8bdc-4c03-bbd5-329768f315c9","cardType":"basic","points":1,"front":"What does M-Pesa in Kenya illustrate about technology access?","back":"Mobile money can widen financial inclusion.","mcqOptions":[{"text":"Mobile money can widen financial inclusion.","correct":true,"explanation":"M-Pesa allows people without conventional bank accounts or nearby branches to transfer, receive and store money, widening access to useful financial services."},{"text":"Mobile money can widen trade protection.","correct":false,"explanation":"Trade protection involves tariffs, quotas and other restrictions on imports, not mobile payment systems. M-Pesa illustrates how technology can widen financial inclusion."},{"text":"Mobile money can widen industrial capacity.","correct":false,"explanation":"Industrial capacity concerns an economy’s ability to produce manufactured goods, which mobile payments do not directly provide. M-Pesa primarily widens financial inclusion."},{"text":"Mobile money can widen transport infrastructure.","correct":false,"explanation":"Transport infrastructure consists of physical networks such as roads, ports and railways, not digital payments. M-Pesa shows how mobile technology can widen financial inclusion."}]},{"id":"e14fa8ff-7b9d-40e5-8c2e-0df13a4145ec","cardType":"basic","points":2,"front":"What did the MDGs represent beyond increasing GDP?","back":"An international attempt to measure and improve development outcomes.","mcqOptions":[{"text":"An international attempt to measure and improve development outcomes.","correct":true,"explanation":"The Millennium Development Goals established internationally agreed targets covering poverty, health, education and other outcomes, broadening the focus beyond growth in GDP alone."},{"text":"An international attempt to maximise economic growth through deregulation.","correct":false,"explanation":"The MDGs were not a programme centred on deregulation or maximising GDP. They set measurable targets for improving poverty, health, education and other development outcomes."},{"text":"An international attempt to replace aid with free trade.","correct":false,"explanation":"The MDGs did not seek to replace international aid with free trade. They coordinated measurable global targets intended to improve a range of development outcomes."},{"text":"An international attempt to standardise national income accounting.","correct":false,"explanation":"National income accounting concerns consistent measurement of output and income, whereas the MDGs focused on measuring and improving social and economic development outcomes."}]}]}],"examCountdown":{"examDate":"2027-05-10","paperLabel":"Component 1"},"heading":"Measurement","title":"Measurement Flashcards","topbar":{"backHref":"/a-level/economics/eduqas/flashcards"},"topicSidebar":"$L38"}]}],"topicId":"24b2a9a8-910e-5428-8a65-db7d4e1dcc78","walled":"$L39"}],"$L3a","$L3b"]