Measures of Economic Activity Flashcards
Define the ‘expenditure approach’.
Adds all spending to buy final goods and services produced within a country over a time period.
Define the ‘income approach’.
Adds all income earned by factors of production that produce all goods and services in a country over a time period.
Define the ‘output approach’.
Calculates the value of all final goods and services produced in a country over a time period.
Define ‘final’.
Goods and services ready for final use.
What is the GDP calculation and what does each letter stand for?
GDP = C + I + G + (X - M)
C = Consumption I = Investment G = Government X = Exports M = Imports
What is GNI/GNP?
Total income received by residents of a country, as a result of all final goods and service produced by factors of production supplied by the country’s residents regardless of where the factors are located.
Define ‘nominal value’.
Value measured in terms of prices that prevail at the time of measurement (current prices).
Define ‘real value’.
A measure of value that takes into account changes in price over time.
Define total GDP and GNI/GNP.
Total measures of the value of output and income provide a summary statement of the overall size of an economy.
Define per capita GDP and GNI/GNP.
Per capita figures are useful as a summary measure of the standard of living in a country.
Define ‘green GDP’.
GDP that accounts for the value of resource and environmental destruction.
What is the green GDP calculation and what does the P mean?
Green GDP = GDP - value of environmental degradation - P
P is all expenitures resulting from cleaning pollution, avoiding further environmental damage and health care cost of pollution induced illness.
What is the GNI/GNP calculation?
GNI/GNP = GDP + net income from abroad
What is the real GDP calculation?
(Nominal GDP ÷ price deflator) x 100
