Measuring the economy Flashcards
GDP measures … rather than wealth: the value of the … of … or expenditure or production
GDP measures flows, rather than wealth: the value of the flow of income or expenditure or production
These flows are always equal: total …= total production/ … = Total …
• These flows are always equal: total incomes= total production/ output = Total Expenditure
Product (output) Method: … … the value of all the … and … produced in the country
Product (output) Method: add up the value of all the goods and services produced in the country
Income method: the … of all incomes generated salaries, … , …. and profit
Income method: the sum of all incomes generated salaries, rent, interest and profit
Expenditure method : Everything that is … (and saved) by … or by the ….
Expenditure method : Everything that is spent (and saved) by consumers or by the government
Consumer spending is represented as….
(C)
Exports are represented as…
(X)
Investment Expenditure is represented as…
(I)
Government spending is represented as…
(G)
Imports are represented as
(M)
GDP =
C+G+I+(X-M)
We have economic growth when the … increases between one period and the next.
GDP
GDP per person=
Gross Domestic Income per person
People’s income =
the standard of living
To increase the income production needs to be increased through:
Use of all resources
To increase the income production needs to be increased through:
Use of all resources, Use them with higher efficiency, Improve technology, Use more skilled labour, Better organisation of work
Investment is the Creation of ‘Capital’: … ; … ; … Capital
Investment is the Creation of ‘Capital’: Machinery; Infastructure; Human Capital
Some income genereated in the UK flows …
Abroad
GNP= … + net … to the UK from … investments
GNP = GDP + the net income to the UK from overseas investments
minus the profits which leave the UK to foreign … abroad
investors
Problems with GDP include that … conceal inequalities: 5 things
Averages
income, class, social, regional, gender etc
PPP is short for
Purchasing Power Parity
PPP … the numbers to take into account the different … of … and the cost of living in diverse places.
standardises
value of money
When comparing … per capita across countries, need to adjust for …
GDP
PPP
