ECON 162 10 26 15 Measuring Inequality Lorenz Curve A model that shows the cumulative income earned by different percentiles of the population Gini Coefficient A measure of inequality that compares the lens shaped region to the area under the line of complete equality o If Gini 0 complete equality o If Gini 1 or 100 complete inequality International Transactions International Markets Quantity Balance of payments accounts Price Exchange rates Expenditure Approach GDP C I G X M X Exports M Imports Goods and services produced at home and sold abroad Goods and services produced abroad and purchased at home X M Net Exports Balance of Payments Accounts A record of one country s trade in goods services income and financial assets with the rest of the world Balance of Payments Consists of Two Primary Accounts 1 Current Account a Flows of goods services income and transfers Balance of Trade b c If current account 0 trade deficit If current account 0 trade surplus 2 Balance of Payments Accounts Uses Double Entry Bookkeeping a Each transaction is entered as both a credit and a debit b Exports Bring revenue into country c Payment for Export d Imports Revenue leaving country e Payment for Import i Credit i Debit i Debit i Credit Due to double entry bookkeeping the overall balance of payments must always equal 0 Any deficit in one account must be financed through a surplus in the other account
View Full Document
Unlocking...