Topic 2.13 - Economic growth
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31 Terms
What is a key measure of economic growth?
A change in real GDP
What is the difference between a value and a volume?
Value - A money account
Volume - A quantity
Is economic growth measured as a value of a volume?
Value
What does GDP stand for?
Gross domestic product
What does GNP stand for?
Gross national product
What does GNI stand for?
Gross national income
What does GNH stand for?
Gross national happiness
What does PPP stand for?
Purchasing power parities
What is the definition of GDP?
The total value of goods and services produced inside of a country
What is the definition of GNP?
The total value of goods and services produced by individuals/firms of a certain nationality
What is the definition of GNI?
Gross domestic product plus income paid into the country by other countries for financial investment
What is the definition of GNH?
A measurement which tries to quantify the total happiness of a country, usually through surveys
What is the definition of nominal GDP?
The total value of goods and services produced inside of a country
What is the definition of real GDP?
Gross domestic product adjusted to take out the effects of inflation
What is the definition of real GDP per capita?
Real GDP divided by the population, to give an average income per person figure
What is the definition of real GDP growth?
The change in the amount of real GDP, measured in percentage terms
What is the definition of PPP?
Alternative exchange rates based on comparing costs of living
What’s the difference between nominal and real GDP?
Real GDP takes into account the effects of inflation but nominal GDP does not and is measured before inflation
What is the difference between GNP and GDP?
GNP is goods and services produced by a certain nationality but GDP is goods and services produced within a country
Why is it important to convert nominal to real GDP?
It helps to see if a country has really become richer by making or selling more than before
What is nominal GDP the same as and therefore what is the equation for it?
AD so AD= C+I+G+(X-M)
What is the equation for nominal GNI?
Nominal GDP + Net income from abroad
What’s the equation for Real GDP?
(Nominal GDP/Price index for the year) x 100
What’s the equation for Real GDP per capita?
Real GDP/Population
What’s the equation for GDP growth rate?
((Real GDP this year-Real GDP year before)/Real GDP year before)) x 100
What’s the equation for the index number?
(Real GDP this year/ Real GDP base year) x 100
Why are exchange rates problematic?
They a re volatile and do not reflect the cost of living
What is used instead of exchange rates in order to convert them to compare GDPs?
PPP
Why is comparing GDP over time between countries sometimes not useful?
A country might be richer through undesirable ways like selling demerit goods or weapons
What are the 10 categories used to measure GNH?
Personal well being
Relationships
Health
What we do
Where we live
Personal finance
Economy
Education and skills
Governance
Environment