GDP Flashcards
what is GDP?
the total value of goods/services produced and consumed in a year
what is nominal GDP?
doesn’t account for changes in price (e.g. inflation or deflation) so is expressed as current prices
what is real GDP?
does account for changes is price, so is expressed as constant prices
how to convert between nominal and real GDP
nominal GDP / price index = real GDP
what is the price index?
inflation/deflation
what is real GDP per capita?
the average wealth of a person
how to calculate real GDP per capita?
real GDP / population = real GDP per capita
benefits of real GDP
shows the average standards of living and economic well-being of a population
negatives of real GDP
doesn’t take into account the income distribution/inequality
what is the value of GDP?
the total monetary value of all goods/services
what is the volume of GDP?
the total number of all goods and services
