GDP and Economy Overview

The total monetary value of all goods and services produced within a country or territory during a specific time period.

The process of turning raw materials or inputs into goods and services.

The act of buying and using goods and services.

The overall system of production, consumption, and exchange of goods and services within a country or region, including the flow of money.

A system of exchange where goods and services are traded directly for other goods and services without the use of money.

A situation where two people each have something the other wants and are willing to trade.

The trade of goods that are imported and then re-exported without being processed or manufactured.

An economy where knowledge, information, creativity, and technology are the main drivers of economic growth.

Hong Kong's economy relies on four main industries: trading and logistics, financial services, producer and professional services, and tourism.

This sector involves the movement of goods, including transportation by trucks and airplanes. It's essential for connecting Hong Kong to global markets.

This sector provides a range of services like banking, insurance, and investment. It plays a crucial role in managing money and capital.

This sector includes industries like accounting, law, and medicine that provide specialized skills and services.

This sector relies on attracting visitors from around the world, boosting Hong Kong's economy through spending on hotels, restaurants, and attractions.

The ability to move up the social ladder by getting a better job, education, or income, which can be facilitated by working in high-paying industries.

The ability of people in an economy to buy goods and services. This can lead to a stronger consumer market.

An economy that is heavily reliant on a few key industries, making it vulnerable to changes in those sectors.

A situation where an economy depends excessively on four key industries, making it prone to economic risks.

A decrease in economic activity in one pillar industry can easily affect the entire economy.

Over-reliance on successful industries can limit the growth of emerging sectors.

The percentage of people in the labor force who are actively looking for work but haven't found it.

When the economy is strong, unemployment is low; when the economy is weak, unemployment is high.

Inflation (rising prices) can sometimes occur alongside low unemployment due to increased spending power.

A sustained increase in the general price level of goods and services over time.

The speed at which prices are increasing. It measures how quickly the general price level is rising.

The quality and quantity of goods and services people can purchase.

A broader concept than standard of living, encompassing factors like freedom, human rights, environmental quality, and overall well-being.

The monetary value of wages, the raw amount of money earned.

The purchasing power of wages, reflecting how much goods and services they can buy.

When the inflation rate exceeds wage growth, people can buy less goods and services, leading to a decline in their standard of living.

High inflation can lead to reduced profits, losses, and decreased investment. Businesses face higher costs, making it difficult to remain competitive.

The trade war between the USA and China reduced Hong Kong's exports to the USA, negatively affecting its GDP and overall economy. This occurred because some Chinese exports pass through Hong Kong, and the USA is a major market for Hong Kong's products.

The Hong Kong government generally avoids interfering in markets, allowing them to allocate resources efficiently. This results in lower production costs and faster service delivery to those who can afford them.

Although usually advocating non-intervention, the government steps in if markets experience chaos, monopolies exploit consumers, income disparities are severe, the underprivileged need help, or the economy requires stimulation.

Examples of government intervention include addressing chaos, breaking monopolies, promoting income equality, providing assistance to disadvantaged groups, and stimulating the economy through infrastructure projects.

A single company controls a large share of the market, which can lead to higher prices and limited choices for consumers. This is why governments might intervene by creating regulations to prevent monopolies.

The gap between the rich and poor, where a small group enjoys a disproportionately large share of wealth while many struggle financially.

The government has a responsibility to protect the vulnerable, particularly when they are exploited, and to create jobs to help those in need and maintain social stability.

When the economy is weak, the government might intervene by investing in infrastructure projects, such as expanding airports, to create jobs and boost economic activity.

An economy that focuses on producing goods and services to be sold to other countries.

The ability of money to move freely in and out of a country without restrictions.

Events happening in other countries can significantly affect the economy of an export-oriented country like Hong Kong.

Outbreaks like SARS and COVID-19 can have a severe impact on an economy by decreasing tourism and causing economic downturns.

A global financial crisis can lead to a loss of investment, decreased stock prices, and a slowdown in economic growth.

A debt crisis in Europe can affect businesses and people in Hong Kong by decreasing consumer spending and investment.

Nominal wages are the actual amount of money earned, while real wages represent the purchasing power of that money after accounting for inflation.