GDP

Question 1

What is GDP

Answer 1

tot monetary value of all the final g/s produced within the country over a given year by FOP both locally or foreign owned

Question 2

What is GDP used for

Answer 2

An indicator of the country’s financial position

Question 3

What are the 3 methods of calculating GDP

Answer 3

Expenditure method
Income method
Output method/value added approach

Question 4

What is the expenditure method

Answer 4

It focuses on aggregating all expenditure of final g/s i.e it focuses on calculating the sum of all expenditures on g/s generated within an economy

Question 5

What does the expenditure method include

Answer 5

Consumption
Investment
Govt
Imports
Exports

Question 6

Formula for exp method

Answer 6

GDP = C+ G + I + (X-M)
(imports are minused because they are included in consumer expenditure

Question 7

Consumer expenditure

Answer 7

-major component in tot expenditure
Consumers spend money on a wide range of g/s to satisfy their wants and needs
This includes expenditure on g/s produced by both domestic and foreign producers.