Economic Growth Flashcards
(18 cards)
GDP
Total value of national output of goods ad services in a given time period
Actual Economic Growth
The annual percentage change in a countries real national output
Potential Economic Growth (Trend Growth)
The estimated annual change in a countries potential level of national output
Calculating GDP - Expenditure Approach
GDP = C + I + G + (X-M)
Totaling the spending of different agents within an economy
Calculating GDP - Income Approach
Totaling the income earned within an economy
Calculating GDP - Value Added Approach
Increase in value of goods as a result of the production process
Value Added
The gross value of the product minus the costs of raw materials and energy.
GDP per capita
Average economic output per person in a country
GDP per capita equation
Total GDP / Population
GNP
Total value of all final goods and services produced by a country in a given period of time including the value produced by residents abroad.
GNI
Total value of goods and services produced in an economy in a given period of time.
GNP equation
GDP + Net income from abroad
GNI equation
GDP + Net primary income + Net secondary income
Real VS Nominal GDP
Nominal GDP measures the value of goods and services at current prices
Real GDP adjusts these values to a constant price level, eliminating the effects of inflation.
Real value in current year
Nominal value in current year/Price index current year x 100
Volume of Output
QUANTITY of goods and services produced by a country
Value of Output
QUALITY of goods and services produced by a country
PPP
The idea that items should cost the same in different countries based on the exchange rate at that time
