Economic Indicators Flashcards

Flashcards covering key economic indicators from the lecture notes.

Gross Domestic Product (GDP)

A major economic indicator representing the monetary value of all finished goods and services produced within a country in a given period.

What GDP includes

Includes consumer, government, and business spending, plus exports minus imports.

Gross National Product (GNP)

Measures the total output of a country's citizens and enterprises, regardless of location, including income from abroad.

GNP Calculation

GNP = GDP + Net income inflow from abroad - Net income outflow to foreign countries.

Difference between GDP and GNP

GDP measures production within a country's borders, while GNP includes income from citizens and enterprises abroad.

Capacity Utilization Rate

Measures how close firms are to producing at maximum capacity, expressed as a percentage.

Factors influencing Capacity Utilization Rate

Demand, Operational Efficiency, economic Conditions, Seasonality, Technology, Labor availability, Supply Chan disruptions, Government Policies, Capacity Expansion,Inventory Managment

Significance of GNP

Provides insight into the economic output of a nation's citizens and companies, both domestically and abroad.

Usefulness of Capacity Utilization Rate

Helps assess how efficiently an economy is using its productive capacity.