2.1.1 Economic Growth

Question 1

What is Gross Domestic Product?

Answer 1

• is a measure of economic growth

- the amount of goods and services produced within an economy

Question 2

Explain the difference between Real and Nominal GDP,

Answer 2

• Real GDP has been adjusted for inflation

- Nominal GDP has not been adjusted for inflation

Question 3

Explain the difference between total and per capita GDP

Answer 3

• Total GDP is the combined monetary value of all goods and services produced within a countries borders
• GDP per capita is GDP divided by the population

Question 4

Explain the difference between value and volume

Answer 4

• Value is the amount of money something is worth

- Volume is

Question 5

Explain the difference between GNP and GNI

Answer 5

• Gross National Product is the total output produced by a citizens country regardless of whether they live there or not
• Gross National Income is GDP + Net income

Question 6

Why must we be careful when comparing GDP across different countries?

Answer 6

Some countries are developing and some are developed

Question 7

Why must we be careful when comparing GDP over time?

Answer 7

Inflation may differ

Question 8

What is meant by ‘Purchasing Power Parity’?

Answer 8

is the economic theory that prices between countries for the same good or service will equalise over time

Question 9

Why might PPP be useful?

Answer 9

Helps avoid misconceptions when comparing prices between countries

Question 10

How is the ONS National Wellbeing indicator measured?

Answer 10

• Families and relationships
• Friends
• Personal freedon
• Personal values
• Health
• Work
• Financial situation