Indicators Of Health Status.

Life expectancy at birth - The number of years newborn children would live if subject to the
mortality risks prevailing for the country. 2010 Ghana-63yrs, USA -78yrs
Under-five mortality rate - Probability of dying between birth and exactly five years of age
expressed per 1,000 live births. 2010 USA 7.5 Ghana 79.6
Infant mortality rate - Probability of dying between birth and exactly one year of age expressed per
1,000 live births. 2010 USA 6.5,Ghana 53
Doctor Patient Ratio-The number of doctors per patient is known as the Patient Doctor ratio.It is
also referred to as doctor population ratio, and patient - doctor ratio.The WHO recommended
doctor patient ratio is 1:600 (one doctor per 600 patients) 3 2010 Ghana 1:11,764, USA USA
1:412
The Gini coefficient is a measure of inequality of a distribution.
Gross Domestic Product: is the monetary estimate od the total goods and services that has been
produced in a country during a specified period , usually a year irrespective of the residents
(citizens and non -citizens).
Gros National Product: It is the income received by normal residents of the country.it is derived by
adding to GDP the receipt by the countrys resident abroad and income received by residents
in the country from assets that they own but which are located abroad.
Net National Product:This is GNP minus Depreciation. In the process of production the equipment or
capital used undergo wear and tear or become obsolete. In other that the country can go on
producing some allowance must be made for capital replacement which is referred to as
depreciation.
Uses Of National Income.
1. It is used to measure the standard of living which is an indicator of the welfare of the
people.
2. It helps to measure the growth rate of the economy.
3. It is used to facilitate the distribution of the national cake
4. It facilitates year to year comparison.
5. It facilitates country to country comparison.
Problems of the Expenditure Approach.
1.
2.
3.
4.
5.

Problem of data collection.

High illiteracy and poor record keeping.
Unwillingness of the people to give the correct information.
Subsistence living.
Smuggling makes estimation of net foreign trade inaccurate

Final goods refer to those goods which are used either for consumption or for investment.While
Intermediate goods refer to those goods which are used either for resale or for further production in
the same year.
Final Goods-In nature they are included in both national and domestic income.
In demand they have a direct demand as they satisfy the wants directly.
In value addition they are ready for use by their final users i.e. no value has to be added to the final
goods.
In Production boundary they have crossed the production boundary.
Example- Milk purchased by households for consumption, car purchased as an investment.
Intermediate Goods
In nature they are neither included in national income nor in domestic income.
In demand they are neither included in national income nor in domestic income.
In value addition they are not ready for use, i.e. some value has to be added to the intermediate
goods.
In production boundary they are still within the production boundary.
Example- Milk used in dairy shop for resale, coal used in factory for further production.

Consumer Price and Producer Price differenciation.

1. CPI is an indicator by which the government calculates the general level of
inflation. PPI is an indicator that shows the average price changes obtained by
domestic producers for their output.
2. The PPI comprises prices of both capital equipment and consumer goods.
Meanwhile, the CPI covers many areas of goods and services.
3. Sales and excise taxes are not taken into account while determining PPI. On the
other hand, the price collected for items is included in CPI.
4. While the Producer Price Index takes into account the price of goods on a
particular date, the Consumer Price Index takes into account the price throughout
the first eighteen working days of a month.
5. CPIs primary use is to adjust income and expenditure. The PPIs primary use is to
deflate revenue streams, which helps to measure the growth of output.

Double counting occurs when the same goods in an economy are counted twice. This can happen
because goods go through several stages of assembly before they find their way to their intended
buyer.
Economists avoid double counting by only including the value of final goods in GDP, That is, goods that
have been purchased for final use by a consumer, with no immediate intent of resale or further
processing.
Theories Of Inflation
Demand Pull Inflation
Cost push inflation
The Monetarist view inflation
Structuralist school of thought on inflation

NONPRODUCTION TRANSACTIONS: public transfer payments, such as Social Security, private

transfer payments, such as gifts, and financial market transactions, since securities represent
either ownership, such as with stocks, or they represent loans, such as bonds. Financial securities do
not represent real production, but simply represent the means to finance production.
Likewise, secondhand sales are excluded because no production is involved except for the sales
service. For instance, goods sold in a consignment shop would not be part of the GDP, but the services
provided by the consignment shop would be included.
Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be
produced
only by a more rapid increase in the quantity of money than in output.
This claim that inflation is a monetary phenomenon is based on the quantity theory of money,
according to which prices vary in proportion to the money supply. This relationship is based on a
mathematical identity,1 according to which the value of transactions carried out in an economy
(understood as nominal GDP) is equivalent to the amount of money circulating in that economy
(understood as the amount of money in an economy multiplied by the number of times this changes
hands; i.e. the velocity of money). If we assume that the velocity of money is constant, in an
economy without economic growth the inflation rate equals the rate of growth in money. Therefore, if
money supply increases, there will be more money chasing the same goods, so prices will go up.
Similarly, if the rate of growth for economic activity and the quantity of money is the same, prices
should remain constant.