Economic growth 2.1.1 unit 31

Question 1

What is the definition of GDP?

Answer 1

Essentially the total market value of all goods and services produced over a period of time. (It is a measure of the output or value added of an economy which does not include output or income from investments abroad or an allowance for the depreciation of the nations capital stock.)

Question 2

What is GNI?

Answer 2

It is GDP plus net overseas interest payments and dividends.

Question 3

What is GNP?

Answer 3

It is the market value of services produced over a period of time through labour or property supplied by its citizens both domestically and overseas.

Question 4

What is National net income?

Answer 4

It’s a measure of national income from investments abroad and an allowance for depreciation of the nations capital stock.

Question 5

What is the ‘volume of national income’?

Answer 5

It is the basket of and services that can be bought with a given amount of money.

Question 6

What is the ‘value of national income’?

Answer 6

It measures the monetary cost monetary cost of the basket of goods and services at a given of prices. It is equal to the value of X the the current level.

Question 7

What is the transfer of payment?

Answer 7

These are things that not included in final calculation of national income.
Such as:-
-Children receiving pocket.
-An individual selling a second hand car but no new car is made.

Question 8

Why is national income measured?

Answer 8

• They are used to make comparisons so that policy makers can make informed decisions.
• They are used to make judgements about standard of living for people.

Question 9

Why may the accuracy of national income statistics be difficult to know.

Answer 9

• Statistical inaccuracies.
• The hidden economy.
• Home produced services.
• The public services.

Question 10

Comparing national income over timer.

Answer 10

• Prices
• The accuracy and presentation of statistics.
• changes in population.
• Quality of good and services.
• Defence and related expenditures.
• Consumption and investment.
• Externalities (green GDP).
• Income distribution.

Question 11

Why may comparing national income between countries be difficult?

Answer 11

• Different ways of measuring it.
• The quality of the data.
• The size if hidden economies may vary in size.
• The quality of goods.
• Large externalities in certain industries that take place in certain countries.

Question 12

What is purchasing power parities.

Answer 12

It is an exchange rate of one currency for another which compares how much a typical basket of goods in one country compared to another.