GDP Flashcards
When does economic growth occur?
When there is a rise in the value of gross domestic product
What does GDP measure?
GDP measures the total goods and services produced each year. It shows a rise in national output
What does economic growth lead to?
Rise in living standards
More employment opportunities
Define real GDP
The value of GDP adjusted for inflation
Define nominal GDP
The value of GDP without the effects of inflation
- misleading as it can make GDP to appear higher than what is actually is
Define total GDP
The combined monetary value of all goods ad services produced in a country’s borders during a specific period of time
Define GDP per capita
The total value of GDP divided by a population. Capita means ‘head’ s it measures the average output of each person in an economy
Define economic growth
A rate of change of output. An increase in a country’s productive potential, which means an increase in the goods and services produced.
How is economic growth measured?
By the percentage change in real GDP per annum
It can be shown through shift of PPF
What is GDP
The standard measure of output which allows us to compare countries.
It is the total value of goods and services produced in a year
An indicator for the standard of living in a country
Define GDP
Gross Domestic Product
Difference between total GDP and GDP per capita
Total GDP represents the overall GDP of a country whereas GDP per capita represents the total GDP divided by the number of people in a country
