Macro-productivity Flashcards
What is GDP v.s. GND?
GDP Is the total dollar value at current price of all final goods and services produced within a country over a given year.
GNP Is the total dollar value at current price of all final goods and services produced by a country over a given year.
What are two methods of measuring GDP?
Expenditure approach and Income approach
What is the expenditure approach?
Is based on the sum of goods and services bought by four sectors of the economy
A)Household consumers ( C and I)
B)Businesses (C and I)
C)Governments (G)
D)foreign buyers (exports and imports)
GDP = C + I + G + (X –M)
What is the income approach?
Is based on the sum of a country’s wages, rent, interest, and profits.
What is Nominal v.s. Real GDP?
Nominal GDP is a measure of productivity that is calculated by using current price
Real GDP is a measure of productivity that is not affected by rising price
What is inflation?
A persistent rise over time in the average price of goods and services—in the “cost of living.“
The most widely used measure of inflation is the consumer price index (CPI) or total CPI
What are the consumer price index?
A measure of price movements, produced by Statistics Canada and obtained by comparing the retail prices of a representative “shopping basket” of goods and services at two different points in time
What is the inflation rate?
Inflation calculated over a defined period, usually measured on an annual basis
What is a GDP deflator?
The GDP Deflator is an index number that compares the nominal GDP to real GDP for a given year.
It is more comprehensive than CPI since it includes all domestically produced goods and services in a country.
Changes in consumer preference and the arrival of new goods/services in the market are also reflected in the GDP deflator
What is a circular flow model?
Shows that an economy’s total spending equals to the income earned by its citizens.
Hence GDP can be calculated using this model.
