National Income Data Flashcards
1
Q
What does national income measure
A
The monetary value of the flow of output of goods and services produced in an economy over a period of time
2
Q
Nominal income
A
Measures income at current prices with no adjustment for the rates of inflation
3
Q
Real GDP
A
Measures the volume of output. An increase in real output means that AD has risen faster than the rate of inflation and therefore the economy is experiencing positive growth
4
Q
What is PPP
A
The exchange rate needed for say $100 to buy the same quantity of products in each country.
5
Q
What is the Big Mac index
A
The Big Mac Index looks at the implied PPP exchange rates between countries and the actual exchange rates and uses this data to see if a currency is under or over-valued against the US dollar.
