Growth and Uses of National Income

Question 1

Short-Run Growth

Answer 1

Actual percentage change in real national output

Question 2

Long-Run Growth

Answer 2

An increase in the potential productive capacity in the economy

Question 3

GDP

Answer 3

Total National Income:
The value of goods and services produced in the economy over a period of time

Question 4

How to to calculate GDP

Answer 4

National Income = National Expenditure = National Output

Question 5

Real GDP

Answer 5

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

Question 6

How to convert from nominal figure to real term figure

Answer 6

Real value divided by index of current period multiplied by nominal value

Question 7

GDP per capita

Answer 7

Per Capita Income
Total income divided by the number of people in the country i.e. total GDP person

A better indicator as not skewed by population

Question 8

GDP by volume

Answer 8

The quality of goods and services produced by a country

Question 9

GDP by value

Answer 9

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

Question 10

GNI

Answer 10

Gross National Income
Is a countries total level of income

GDP plus net income for abroad