CHapter 2 Flashcards
periods of steady growth in output along with an improvement in living standards
economic growth
measured by gdp or real gdp
economic growth
T or F
It is an economic growth if it fluctuates
F, must be continuous
T or F
there is no econ development, if there is no econ growth
T
market value of all final goods and services produce within a nation in a given time
gross domestic product
measurement of output based on current price
Nominal GDP
measurement of output based on changes in inflation
Real GDP
T or F
even foreign companies INSIDE the country included in the computation of gdp
T
difference between nominal and real gdp
GDP deflator
GDP is based from the spending by household, businesses, and the government in a given period
Expenditure Approach
GDP is based from the earnings by househods, businesses, and the government in a given period
Income Approach
GDP is the sum of the amount of final goods adn services produced and multiplied by the respective prices in a given period
Flow of Product Approach
GDP is the sum of the output of the major industries of the economy for a given period
Gross Value Added Approach
3 MAjor Sectors in the PH
Agriculture
services
industry - highest percentage
Notes on GDP calculations
a. only final goods
b. secondary sales not included
c. only final goods for the priod
GDP is computed
quarterly
Limitations of GDP
a. not include non market activities that could be considered part of economic activity
b. not include informal sector (illegal or unregistered business)
c. not include externalities (eg. natural calamities)
market value of all final goods and services produced by nationals of a country for a given period
gross national product
total income received by most basic factors of production in a country
NAtional Income
Differntiated gdp and gnp
gdp- all inside the country even foreign companies
gnp- all citizens of a country even not currently in the country but exclude foreign
factors of production
labor - salaries/wages
land - rent
capital - interest
entrepreneur - profit
income received bt an individual net of taxes
Disposable Income
(take-home pay)
summary measure of average development in key dimensions of human development
human development index
geometric mean of normalized indices for each of the three dimensions
human development index
key dimensions of human development index
long and healthy life
being knowledgeable
decent standard of living
states that at a point in time, happiness varies directly with income both among and within nations, but ovetime happiness does not trend upward as income continuous to grow
Easterlin paradox
