Flashcards
LvL 2 Economics Exam Prep 91224 - GDP
Cards in this deck (10)
- 1Define 'GDP''Gross Domestic Product'-measurement of the value of all goods and services within a country produced within a year.
- 2How to calculate GDPAdd up the total spending or add up the total incomes within the economy
- 3GDP is comprised ofC+I+G+(X-M)
- 4Define 'Nominal' GDPThe current value of all goods and services produced within a year, in current year dollars.
- 5Define 'Real' GDPReal GDP is Nominal GDP adjusted for inflation (fluctuations in price level) - Indicating if production has increased.
- 6How to calculate Real GDPNominal GDP
_____________ x 1,000
Price Index - 7What is the difference between Nominal and Real GDPIf the price levels increase, Nominal GDP will also increase, even if production remains the same. Therefore Nominal GDP is not an accurate measurement of production and economic growth.
- 8What are the limitations of using Real or Nominal GDP as measurements of economic growth* Does not show what goods are being produced, health, education or weapons.
* How wealth is distributed, small proportion of population holds greatest proportion of wealth.
* How great illegal income and production of goods and services contributes to the economy. - 9Define 'Productive Capacity'Indicates whether a country is able to increase the production of goods and services so real production and incomes can increase.
- 10Define 'Net Social Welfare'Measurement of non-economic and economic factors that contribute to living standards, i.e environment, access to public goods and services, traffic congestion.
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- Key concepts around GDP in relation to Level 2 economics external, 21224, Analyse Economic Growth Using Economic Concepts and Models.
- Created by
- Dani Young · Sep 2021
- Updated
- Sep 25, 2021
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