Lesson 5 - Growth as Change in GDP Flashcards
1
Q
What is GDP per capita used for?
A
Estimate living standards for a country’s population
2
Q
How is GDP per capita calculated?
A
GDP/Population
3
Q
What is real GDP?
A
GDP with adjustment for inflation
4
Q
What is nominal GDP?
A
Figure without adjustment for inflation
5
Q
What is purchasing power parity?
A
Exchange Rate
Rate at which 1 currency is converted into another to purchase the same amount of goods + services
6
Q
How useful is GDP as a measure of living standards?
A
Approximate measure of living standards
Growth indicates healthy economy
7
Q
What are the drawbacks of GDP as a measure of living standards?
A
Only measures average
Doesn’t consider inequality
Doesn’t account for environmental damage
Doesn’t consider for goods + services that aren’t sold for a price
