theme 2

Question 1

what is economic growth

Answer 1

the rate of change of output
- increase in the long term productive potential of the country
- occurs when rise in value of GDP

Question 2

GDP (gross domestic product)

Answer 2

total value of goods and services produced in a country within a year
- indicator of living standards

Question 3

types of GDP

Answer 3

per capita - GDP ÷ population
- grows if national output grows faster than population
real GDP - adjusted to effects of inflation
nominal GDP - not adjusted for inflation

Question 4

GNI (gross national income)

Answer 4

GDP + net overseas interest payments and dividends
- subtracts amounts ppl send back to home country

Question 5

GNP (gross national product)

Answer 5

value of all goods and services produced by citizens of a country (whether they live in the country or not does not matter)

Question 6

purchasing power parities

Answer 6

exchange of one currency for another
- basket of goods, compares costs of one country to another
- used to compare cost of living