Measurement of macroeconomic objectives(Growth and uses of national income 4.2.1) Flashcards
Short-run growth
The actual annual percentage change in real national output(GDP)
Long-run growth
An increase in the potential productive capacity of the economy
GDP definition
The value of goods and services produced in the economy over a period of time
National expenditure
the sum of consumption + investment + government spending+ net exports
National income definition
Adding up all an economy’s incomes(wages, interest, profits and rents)
National output definition
The value of output from each of the main economic sectors
real gdp
The value of goods and services produced in the economy over a period of time taking into account inflation
Nominal value
Is expressed in monetary terms i.e. in current prices
Real value
adjusted for inflation by judging figures against a base year
How to convert from nominal to real terms
Real value= index of comparison period(usually base year) divided by index of current period then multiplied by nominal value
GDP per capita definition
Total income(GDP) divided by the number of people in the country i.e. total GDP per person
Volume definition
The quantity of goods and services produced in a country
Value definition
The monetary worth of the goods and services produced in a country
GNI definition
total level of income- GDP plus net income from abroad for example interest dividends
