9.4 Uses of National Income Data

What us economic growth and how is it measured

Economic growth is the rise in the value of GDP, which measures the quantity of goods and services produced in an economy.

What is the difference between nominal GDP and real GDP

Nominal GDP is not adjusted for inflation; real GDP is adjusted for inflation, giving a more accurate picture

What does GDP per capita represent

Total GDP/ Total Population, showing average output per person and allowing for comparisons between countries

What is Gross National Product (GNP)

GNP includes GDP plus income from overseas assets, minus income earned from foreign residents withing the country

What is Gross National Income

GNI is GDP plus product taxes (minus subsidies) and income from abroad, including wages and property income

Why might GDP not reflect living standards accuratley

GDP doesn’t show income distribution, ignores black market activity, and doesn’t account for welfare or well-being

Why is purchasing power parity (PPP) important in comparing living standards

PPP adjusts exchange rates to reflect the cost of living, helping to make more accurate international comparisons

Name a non-economic measure that can complement GDP to assess living standards

The Happiness Index