Gross Domestic Product Flashcards

1
Q

Define GDP

A

the value of goods and services produced in the economy over a period of time.

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2
Q

GDP is a key measure of _____________________

A

GDP is a key measure of the health of an economy.

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3
Q

What are the 3 ways to calculate GDP

A

-National Expenditure

-National Income

-National Output

(National income = National Expenditure = National Output)

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4
Q

What is National Expenditure made up of?

A

Consumption + Investment + Government Spending + Net Exports

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5
Q

What is national income made up of?

A

Adding up all an economy’s incomes (wages, interest, profiles and rent)

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6
Q

What is national output a measure of

A

The value of output from each of the main economic sectors.

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7
Q

What are the 4 sectors GDP measures?

A

-Primary

-Secondary

-Manufacturing

-Quaternary

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8
Q

Factor Incomes of GDP

A

-Income from people in jobs and self-employment (e.g. wages and salaries).

-profits of private sector businesses

-rent income from the ownership of land.

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9
Q

Definition of Real Gross Domestic Product

A

-The value of goods and services produced in the economy over a period of time taking into account inflation.

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10
Q

How is Nominal Value expressed?

A

In monetary terms e.g. current prices.

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11
Q

How is real value adjusted?

A

It is adjusted for inflation by judging figures against a base year.

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12
Q

How to convert from nominal to real terms

A

Real value = index of comparison period / index of current period

This value then multiplied by nominal value.

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13
Q

What is Total national income?

A

The value of all goods and services produced in a country.

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14
Q

What is GDP per capita?

A

The total income divided by the population of a country.

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15
Q

Why can GDP per capita be a better indicator than GDP ?

A

Because it is not skewed by the total population of a country.

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16
Q

What can GDP per capita be used to compare between countries?

A

The standards of living can be compared.

17
Q

What is volume?

A

The quantity of goods and services produced in a country.

18
Q

What is value?

A

The monetary worth of the goods and services produced in a country.

19
Q

What is Gross National Income?

A

A countries total level of income from within a countries border.