Chap 2 - Measuring Economic Growth and Development Flashcards
is the period of steady growth in output along with an improvement n living standards
Economic growth
Economic growth is measured by
GDP / Real GDP
is the market value of all final goods and services produce within a nation in a given time
Gross Domestic Product (GDP)
measure of output based on prices
Nominal GDP
measure of output based on changes in inflation
Real GDP
The difference between the Nominal GDP and Real GDP is called the
GDP Deflator
GDP calculation in which GDP is based from the spending by households, businesses, and the government in a given period
Expenditure approach
GDP calculation in which GDP is based from the earnings of households, businesses, and the government in a given period
Income approach
GDP calculation in which GDP is the sum of the amount of final goods and services produced and multiplied by their respective prices in a given period
Flow of product approach
GDP calculation in which GDP is the sum of the output of the major industries of the economy for a given period
Gross Value Added (GVA) approach
things that we don’t have control of (Ex. Fortuitous events)
Externalities
market value of final products and services produced by nationals of country for a given period
Gross National Product (GNP)
Total income received by the most basic factors of production of country
National Income
Income received by an individual net of taxes. Take-home pay
Disposable Income
is a summary measure of average achievement in key dimensions of human development
Human Development Index (HDI)
The HDI is the geometric mean of normalized indices for each of the three dimensions, what are those three dimensions?
- A long and healthy life
- Being knowledgeable
- Having a decent standard of living
A long and healthy life is measured by
average life span
Being knowledgeable is measured by
Literacy index, and then the years of schooling, and if country has free education and the reported literacy rates
Having a decent standard of living is measured by
using the GNI
states that a point in time happiness varies directly with income both among and within nations, but over time happiness does not trend upward as income continues to grow
Easterlin Paradox
