Definitions (Economic indicators) Flashcards
Definition of Standard of Living (SOL)
SOL reflects the well-being of an average person in a country. It includes material and non-material well-being.
Definition of Material well-being
Material well-being refers to the quantity of G&S available to the average person in a country.
Definition of Non-material well-being
Non-material well-being accounts for the qualitative aspects of SOL, including life expectancy and education level.
Definition of Gross Domestic Product (GDP)
GDP is the total money value of all final goods and services produced within the country’s geographical boundary during a given period of time.
Definition of Real GDP per capita
Real GDP per capita refers to the income and expenditure of the average person in the economy, after eliminating effects of price changes.
Definition of Real GDP per capita (PPP)
Real GDP per capita (PPP) converts GDP into a common currency to account for differences in the cost of living among countries at a point of time.
Definition of Real national income
Real national income refers to national income measured at constant or base year prices
Definition of Nominal national income
Nominal national income
Definition of Nominal national income
Nominal national income refers to national income measured at current prices.
Formula of %Δ in real GDP
%Δ in real GDP ≈ %Δ in nominal GDP - %Δ in price level
Formula of Real GDP
Real GDP = (Nominal GDP x 100)/ GDP deflator
Definition of Consumer Price Index (CPI)
Consumer Price Index (CPI) is an index number for the price level. It is the weighted average of prices of a basket of goods/services purchased by the average household in a specific time period
Definition of unemployment
Unemployment represents the number of people of working age who are willing and able to work, but are unable to find suitable jobs.
