Measures of Economic Activity Flashcards

1
Q

Define the ‘expenditure approach’.

A

Adds all spending to buy final goods and services produced within a country over a time period.

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2
Q

Define the ‘income approach’.

A

Adds all income earned by factors of production that produce all goods and services in a country over a time period.

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3
Q

Define the ‘output approach’.

A

Calculates the value of all final goods and services produced in a country over a time period.

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4
Q

Define ‘final’.

A

Goods and services ready for final use.

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5
Q

What is the GDP calculation and what does each letter stand for?

A

GDP = C + I + G + (X - M)

C = Consumption
I = Investment
G = Government
X = Exports
M = Imports
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6
Q

What is GNI/GNP?

A

Total income received by residents of a country, as a result of all final goods and service produced by factors of production supplied by the country’s residents regardless of where the factors are located.

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7
Q

Define ‘nominal value’.

A

Value measured in terms of prices that prevail at the time of measurement (current prices).

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8
Q

Define ‘real value’.

A

A measure of value that takes into account changes in price over time.

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9
Q

Define total GDP and GNI/GNP.

A

Total measures of the value of output and income provide a summary statement of the overall size of an economy.

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10
Q

Define per capita GDP and GNI/GNP.

A

Per capita figures are useful as a summary measure of the standard of living in a country.

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11
Q

Define ‘green GDP’.

A

GDP that accounts for the value of resource and environmental destruction.

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12
Q

What is the green GDP calculation and what does the P mean?

A

Green GDP = GDP - value of environmental degradation - P

P is all expenitures resulting from cleaning pollution, avoiding further environmental damage and health care cost of pollution induced illness.

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13
Q

What is the GNI/GNP calculation?

A

GNI/GNP = GDP + net income from abroad

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14
Q

What is the real GDP calculation?

A

(Nominal GDP ÷ price deflator) x 100

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