Measures Of Macroeconomic Performance (L2)

Question 1

Index number formula

Answer 1

Raw no in period
______________
Raw number in base period X 100

Question 2

Nominal value measurements

Answer 2

Measurements made using prices that are current at the time a transaction takes place. Price that we SEE

Question 3

Real value

Answer 3

Quantity after removing effects of price changes

Question 4

How do you convert from nominal to real

Answer 4

100 X nominal GDP / Real GDP

Question 5

If current prices were estimated to be £1.613 billion, and the underlying price index was 105.2, what would the real value of GDP be?

Answer 5

105.2= 100 x 1.613/ real GDP

Real GDP = £1.533 billion

Question 6

GDP

Answer 6

Represents total output of an economy during a period of time

Question 7

GNI

Answer 7

Takes into account for income flows between countries earned in domestic economy

Question 8

GNP (Gross national product)

Answer 8

How the world bank compares average incomes across countries

Question 9

Why is GNI used instead of GDP when monitoring the living standards in a country?

Answer 9

More closely reflects the incomes of the residents including net flows of income between countries

Question 10

Advantages of using GNI

Answer 10

Relatively straightforward and a well established indicator that’s available for most countries in the world