Topic 9: Key Economic Indicators Flashcards
(18 cards)
What is Economic Growth
Increase in real national income over time
How is Economic Growth measured
% change of real Gross Domestic Product (GDP)
What is sustainable economic growth
Economic growth can be maintained without creating economic problems in the future
What is inclusive economic growth
Economic growth is broad-based across economic sectors creating productive opportunities for the population
What is GDP
Gross Domestic Product. The total market value of all final goods and services newly produced within the geographical boundaries of an economy in a given period of time
What is nominal GDP
GDP given in current prices, without adjustment for inflation. Changes according to quantity and/or average price levels of goods and services.
Convert nominal GDP to real GDP
(nominal GDP/GDP deflator) x 100%
How to calculate % change in real GDP
% change in nominal GDP - Inflation Rate (%)
Limitations of real GDP?
Real GDP calculates the total economy’s production but does not accurately reflect the standard of living of the average person
How to calculate real GDP per capita
Real GDP/Population Size
How to calculate % change in real GDP per capita
% change in real GDP - % change in population size
Limitations of real GDP per capita?
Does not assure that everyone is enjoying the same standard of living
What is GNI
Gross National Income. Measures income of country’s residents regardless where the income is from
How to calculate real GNI?
Real GDP - net factor income from abroad
Limitations of using national income statistics to measure economic performance?
Economic growth may be unsustainable or non-inclusive
What is material SOL
Material Standard of Living refers to quantity and quality of goods and services available for consumers
What is non-material SOL
Non-Material aspect of SOL refer to intangible aspects enabling residents to have a enjoyable life
Why is non-material SOL hard to quantify
non-material involves aspects subjective and difficult to quantify like healthcare, education standards etc
