LS2 - Measures Of Economic Perfomance Flashcards
What are the rates of change of real GDP as a measure of economic growth?
GDP is the total value of national output of goods and services in a period. This is a measure of economic growth as an increase in the real value of food and services produced is measured by real GDP.
What’s the difference between real and nominal measurements?
Nominal GDP is the financial value of the National output of goods and services measured at CURRENT prices. Real GDP takes inflation into account while expressing the output of goods and services of a nation.
What’s the difference between total and per capita?
Per capita is per head and total is the value of the measurement.
What’s the difference between value and volume?
The value of goods and services show what goods and services are worth. The volume of goods and services show the number of goods and services produced.
What is GNP AND GNI?
Gross National product and income. GNI is GNP plus net property from income from overseas. GNP is the market value of the final goods and services produced by a nation.
What is PPP? And in international comparisons?
Purchasing power parity. Higher cost of living economics will have the benefit over the lower cost of living economies meaning a more powerful purchasing parity.
What are the limitations of using GDP to compare living standards between countries?
GDP understates real national income per capita due to the presence of unpaid work.
What is the relationship between real incomes and subjective happiness?
Subjective happiness is the levels of happiness in one’s life and the higher someone’s income is, increases their subjective happiness.
Index number formula.
(Raw number in period/ raw number in base period) x 100
Converting nominal measurements to real.
(Nominal GDP/ real GDP) x 100
