Th2.1: Rates of GDP as Measure of Economic Growth Flashcards
What is economic growth?
the rate of change of output. it is an increase in the long term productive potential of the country - therefore more is produced
What is economic growth usually measured in?
percentage change in real GDP per annum or shift of PPF
GDP definition
standard measure of output which allows us to compare countries. the value of goods and services produced in a country over a given period of time
What is GDP an indicator of?
the standard of living in a country
What does total GDP represent?
overall GDP for the country
What does GDP per capita represent?
the total GDP divided by the number of people in a country
When does GDP per capita grow?
if national output grows faster than population over a given period of time
What is the difference between real GDP and nominal GDP?
real strips out effects of inflation whilst nominal doesn’t
What can real values be described as?
volume of national income i.e sized of basket of goods
What do nominal values represent?
value of national income i.e monetary cost of basket of goods
