economie - GDP calculation

what does “not adjusted for price changes” mean?

it’s the value at a certain moment in time including inflation

how do you explain that GDP grows due to inflation

the value of an economy is based both on quantity and price. If the prices increase due to inflation, the GDP will increase as well.

what is the formula to calculate the GDP?

Q * P = nominal GDP

Gross Domestic Product : GDP

is the total value of all final goods and services produced within an economy during 1 year

national income

the sum of all incomes of the factors of production

what do we use the real GDP for

to calculate the evolution of an economy

Gross National Product: GNP

is the total value of all final goods and services produced during a year by the residents of an economy

What should we use to compare the wealth between countries?

GDP per capita

GDP can be calculated from 3 approaches

• production approach

• income approach

• expenditure approach

production approach

GDP is sum of added values of goods and services produced

income approach

GDP is sum of all incomes distributed to factors of production

expenditure approach

GDP is sum of all purchases of goods and services (C+X-M)

added value

turnover - purchases

incomes

wages/salaries + profits

profits

turnover-purchases-wages/salaries