Econ Growth

Question 1

GDP

Answer 1

Value of all finals g/s produces in a Yr

Question 2

Nominal GDP

Answer 2

Measures of nations output produced in a Yr expressed as a value of price - no inflation

Question 3

Real GDP

Answer 3

GDP adjusted price from base Yr - inflation

Question 4

GDP Calc

Answer 4

● income approach
● output approach
● expenditure approach

Income = output = expenditure

Question 5

Income approach

Answer 5

Add up all factor incomes earned in a yr

Question 6

Output approach

Answer 6

Final value of g/s produced in economy in Yr

Question 7

Expenditure approach

Answer 7

Add up all countries expenditure on all g/s in a yr

Question 8

GDP cons

Answer 8

● Double counting
- value of g/s in primary and secondary sector … not incl only final value

● Errors in calculation
- hard to process large amounts of data

● Inequalities
- GDP high bc growth from particular industry … increase NI but no increase LS

● Informal economy
- g/s produced in hidden economy not counted & economy hard to estimate size

● Home produced gs
- sustenance farmers grow & consume own gs

Question 9

GDP pros

Answer 9

● Internaltinally recognised way of calc GDP

Question 10

GNI

Answer 10

Value of g/s produced over period time + net overseas interest payments & dividends

Question 11

GDP per capita cons

Answer 11

● Remitamces
- don’t inclu incomes earned abroad even tho increase LS

● Influence of foreign direct investment
- incomes earned sent back to their own country
- increase GDP but ppl don’t get richer bc money don’t say in domestic economy … don’t increase LS

● Spending
- not all expenditure increase LS
Eg - WW2 = hight GDP but money spent on defence

Question 12

Value of NI

Answer 12

Monetary value of g/s

Question 13

Volume of NI

Answer 13

No. of g/s produced