GDP Flashcards
What is GDP
Gross domestic product.
The market value if all final goods and services produced in a country at a specific time frame
What is included in a market
Only things trade in the market and only final goods
What are the components of final expenditure
Consumption, Investment, Government expenditure, Net eXports
Formula for total expenditure
C+I+G+NX (exports-imports)
What is GDP (Y) equal to
Total expenditure= total income= total production
Whats is nominal GDP
Final goods and services produced in that year expressed in the price of that year
What is real GDP
Final goods and services produced in a given year expressed in the price of the base year
Calculation for nominal GDP
New-old /old *100
GDP per capita
Compares GDP per person to compare standard of living
What contributes to the change in standard of living
The growth of potential GDP per person and fluctuations of real GDP per person around potential GDP
Whats are the four stages of the business cycle
Peak, trough, expansion and recession
What is PPp
Purchasing power Parity, the conversion if reak GDP into a common currency and common set of prices to compare living standards across countries
Is Real GDP a perfect measure
No it has many bias and situations it excludes
