26 March 2013

"A first-rate city with a second-rate country attached." That is how one rather brutal friend of mine describes London. For a certain kind of "global citizen", London today feels like the new capital of the world - while, for people living in other parts of the UK, it all too often feels like another planet.

The Office for National Statistics reckons that the average Londoner contributes 70% more to Britain's GNP than people in the rest of the country.

Without London, the UK would look like a rather different economy - one less focussed on financial services, more reliant on manufacturing.

Should Britain let go of London?Thinker…

This is a news article from 2013. How does it link to what we have learnt this week?

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London's top ten boroughs alone are worth more than all the property of Wales, Scotland and Northern Ireland, added together.

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The Informal SectorLO:

• To understand how employment conditions vary

• To evaluate the effectiveness of economic measures

StarterDescribe what happens to employment structure over time

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Often subsistence farming

Labour intensive

Farming becomes capital intensive

Industrialisation requires large secondary workforce

Industry becomes increasingly mechanised

Foreign imports become cheaper

QOL improves so demands for services increase

This graph represents the UK’s changing employment structure over time. A similar pattern can be seen when looking at countries at different stages of development.

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Nepal

Brazil

USA

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Which of these four is the best measure of economic activity?

GDPGNP

Trade balanceEmployment

structure?

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GDP vs GNPIn the USA, revenue from McDonalds is included in it’s GDP but does not include money from foreign branches GNP.

So there are problems in the calculation of these measures

Evaluating measures of economic activity

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Evaluating measures of economic activity

If we look at GDP or GNP what would it tell us about these countries?

Kenya GDP: 37.23 bn UK GDP: 2.43 tr

64 times higher!!

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Evaluating measures of economic activity

Rich or poor?

UK Kenya

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So…

As well as flaws in their calculation GDP / GNP do not measure the economic well being of society.

Some economists suggest that the sustainability of the economy should be measured as well as the impact on the environment

Evaluating measures of economic activity

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Evaluating measures of economic activity

Employment structure and mechanisation:

Generally LEDCs have larger numbers of workers in the primary sector – does this mean that this sector generates more money than farming in MEDCs?

Factory worker - £32,500

Farmer - £26,000

Shop assistant - £12,500

Evaluating measures of economic activity

Does working in the tertiary sector guarantee higher wages?

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Evaluating measures of economic activity

Finally, none of the measures recognise illegal activity…

It is estimated that Afghanistan exports $4bn of opium each year

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Like the Nando’s PERi-ometer, how much can you challenge yourself?

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EITHER:

Compare the four measures of economic activity. How effective are they as measures of economic activity?

OR:

Describe one problem of using total GDP as a measure of economic activity and one problem of using employment structure as a measure of economic activity.