2.1.1: Economic Growth

Question 1

What does GDP mean?

Answer 1

• Gross Domestic Product: The total value of goods and services produced in a country

Question 2

What is the difference between real and nominal GDP?

Answer 2

-Real GDP is adjusted for inflation or deflation
- whereas nominal GDP does not take inflation into consideration.

Question 3

What is GNI?

Answer 3

• Gross National Income: The value of goods and services produced domestically plus net overseas interest payments and dividends.

Question 4

What is GNP?

Answer 4

• Gross National Product: Thé value of goods and services over a period of time through labour of property supplied by citizens by a country both domestically (GDP) and overseas

Question 5

What are purchasing power parities?

Answer 5

The exchange rate at which the currency of one nation must be converted into the currency of another so that the same basket of goods can be used

Question 6

What are the macroeconomic indicators?

Answer 6

• Trade- imports and exports
• Inflation- rate of growth of prices
• Growth- economic growth (income and GDP)
• Employment- low unemployment
• Redistribution of income- how income is spread in the economy
• Stability- economy and growth