National Income Analysis and Measurement Methods
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Questions and Answers

What happens to the economy when leakages are greater than injections?

  • There will be no change in the economy.
  • The economy will stabilize.
  • The economy will contract. (correct)
  • The economy will expand.

    • Which equation represents the National Income (GDP) of a country?

  • GDP = X + M + T + S
  • GDP = S + T + M + I
  • GDP = C + I + G + (X - M) (correct)
  • GDP = C + G + (I - X)

    • What is a primary method for measuring National Income?

  • Public Spending Method
  • Savings/Investment Method
  • Production/Value Added Method (correct)
  • Devaluation Method

    • Which component is NOT included in the equation for calculating GDP?

    <p>Tax Revenue</p> Signup and view all the answers

    On which assumption is the equation S = I based?

    <p>Savings are equal to investments.</p> Signup and view all the answers

    How is the national income formally defined?

    <p>The net value of economic goods and services produced.</p> Signup and view all the answers

    What significant event contributed to the economic boom in Papua New Guinea?

    <p>The establishment of the PNG LNG mining project.</p> Signup and view all the answers

    Which of the following is an example of the income method of measuring national income?

    <p>Calculating wages paid to workers in the production process.</p> Signup and view all the answers

    What subjects are required for students in Grades 7 and 8?

    <p>English Language, Science, and Making a Living</p> Signup and view all the answers

    Which of the following subjects is not part of the curriculum for Grades 9 and 10?

    <p>Home Economics</p> Signup and view all the answers

    What additional options do students have for Science in Grades 11 and 12?

    <p>Biology, Chemistry, or Physics</p> Signup and view all the answers

    How many courses are required for students in Grades 11 and 12?

    <p>Seven courses</p> Signup and view all the answers

    Which subject in the Grades 11 and 12 curriculum focuses on economic principles?

    <p>Social Science</p> Signup and view all the answers

    Which grade levels require students to complete all six courses listed in their curriculum?

    <p>Grades 7 and 8</p> Signup and view all the answers

    What type of Mathematics courses are available to students in Grades 11 and 12?

    <p>Both Mathematics A and Mathematics B</p> Signup and view all the answers

    What subject is consistently included across all grades from 7 to 12?

    <p>Mathematics</p> Signup and view all the answers

    What is the income per capita based on GNP?

    <p>K2000</p> Signup and view all the answers

    What factor contributes to unequal distribution of benefits from economic growth?

    <p>Corruption</p> Signup and view all the answers

    What does a rise in income per capita usually indicate?

    <p>Economic growth</p> Signup and view all the answers

    Which of the following is a method for promoting economic independence?

    <p>Import-Substitution Manufacturing</p> Signup and view all the answers

    What is a potential outcome of significant corruption in economic development?

    <p>Wider wealth gap</p> Signup and view all the answers

    What is the main goal of the government regarding economic self-reliance?

    <p>To rely on local production for needs</p> Signup and view all the answers

    Which organization is associated with the taxation process mentioned in the economic management?

    <p>Internal Revenue Commission</p> Signup and view all the answers

    What challenge does a country face even with economic growth?

    <p>Fair distribution of benefits</p> Signup and view all the answers

    What is the purpose of the K10 million District Services Improvement Programme (DSIP) fund allocated to each district?

    <p>To improve services and infrastructure in districts</p> Signup and view all the answers

    What is the primary aim of Papua New Guinea's third goal regarding national sovereignty?

    <p>To become politically and economically independent.</p> Signup and view all the answers

    What is a primary goal of the government funding the Rural Development Bank (RDB)?

    <p>To offer lower interest loans to rural farmers</p> Signup and view all the answers

    How is income per capita calculated for GDP?

    <p>Income per capita = GDP ÷ Population.</p> Signup and view all the answers

    What issue does the government face regarding the allocation of public funds?

    <p>Many public sector leaders are misappropriating funds</p> Signup and view all the answers

    What is the significance of Papua New Guinea's fourth goal concerning natural resources?

    <p>To consider resources for collective benefit and future generations.</p> Signup and view all the answers

    How does a decrease in income per capita affect living standards?

    <p>It typically results in lower living standards and increased poverty risk</p> Signup and view all the answers

    Which organization forms does Papua New Guinea aim to use primarily for its development according to the fifth goal?

    <p>Papua New Guinea forms of social, political, and economic organizations.</p> Signup and view all the answers

    What is a consequence of the unequal distribution of benefits from economic development?

    <p>It creates a wider gap between the rich and the poor</p> Signup and view all the answers

    What does economic growth aim to achieve each year in Papua New Guinea?

    <p>An overall increase in per capita income.</p> Signup and view all the answers

    What has contributed to the economic boom in PNG over the last five years?

    <p>Increased investment in mineral resource development</p> Signup and view all the answers

    What dependency issue does PNG face in relation to its economy?

    <p>It heavily relies on foreign countries for economic stability</p> Signup and view all the answers

    What is the total value represented by GDP?

    <p>The total value of final goods and services produced during a year.</p> Signup and view all the answers

    What action is the government encouraged to take with regards to investments abroad?

    <p>Promote local investments and limit abroad investments</p> Signup and view all the answers

    What additional income is considered when calculating the GNP of Papua New Guinea?

    <p>Income earned from overseas by residents.</p> Signup and view all the answers

    What constitutes the population used in calculating income per capita in Papua New Guinea?

    <p>The total population of the country.</p> Signup and view all the answers

    Study Notes

    National Income Analysis

    • The value of goods and service produced by a country's private and public enterprises within a year.
    • National income is lower in developing countries like PNG compared to developed nations like Australia.
    • Recent years have seen a rise in PNG's national income due to increased investment in sectors like mining.

    Methods of Measuring National Income

    • Production/Value Added Method: Summing the value of all final goods and services produced in the economy.
    • Income Method: Adding all the incomes received during the production process (rent, wages, interest, and profit).
    • Expenditure (Outlay) Method: Adding the expenditures incurred to produce all final goods.

    The Eight Aims and National Goals

    • National Sovereignty and Self-reliance: Achieving political and economic independence, with self-reliance in the economy.
    • National Resources and Environment: Using natural resources for collective benefit and replenishing them for future generations.
    • Papua New Guinean Ways: Achieving development through Papua New Guinean social, political, and economic structures.

    Specific Learning Outcomes

    • Identify and explain the economic goals of the government.
    • Analyze economic conditions in relation to the government’s economic goals.
    • Propose measures to solve economic problems.

    Economic Growth and Fair Distribution

    • Economic growth is defined as an increase in a country's per capita income.
    • Income per capita is calculated by dividing national income (GDP/GNP) by the population.
    • PNG aimed to achieve growth by increasing its income per capita.
    • The government strives for fair wealth distribution amongst the population.
    • Redistribution of income occurs through annual national budgets allocating funds to various sectors.
    • Corruption can hinder fair distribution, leading to inequality between the rich and the poor.

    Economic Independence and Self-Reliance

    • The government aims for economic independence and a self-reliant economy.
    • This involves meeting most needs within the country (goods, services, finance, capital, and expertise).
    • Policies like import-substitution, export-oriented manufacturing, and downstream processing aim to achieve self-reliance.

    Examples of National Goals and Aims

    • Examples demonstrating success in achieving the aims include:
      • The DSIP fund, providing K10 million to each district.
      • The government's allocation of funds to the Rural Development Bank.
      • The government providing subsidies to reduce production costs for local producers.
    • Examples demonstrating challenges in achieving the aims include:
      • Corruption in the public sector hindering fair distribution of wealth.
      • PNG citizens investing in foreign countries.
      • Over-concentration of development in Port Moresby, neglecting rural areas.

    Conclusion

    • A decline in income per capita leads to a decrease in economic growth and living standards, increasing vulnerability to poverty.
    • Unequal distribution of wealth benefits those in key positions, while the poor become poorer, widening the gap between rich and poor.
    • PNG has experienced economic growth due to increased investments in sectors like mining.
    • Dependency on foreign countries is still a concern, as PNG remains a developing nation.

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    GRADE.12.MODULE1.pdf

    Description

    Explore the key concepts of national income, its measurement methods, and the implications for developing countries like Papua New Guinea. This quiz covers the production, income, and expenditure methods for assessing national income, as well as the eight national goals related to economic sovereignty and resource management.

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