Flashcards
IB Economics SL Section 2 Macroeconomics
Cards in this deck (4)
- 1GDPThe total value of goods and services produced within an economy within the boundaries of a specific nation during a specific period of time.
- 2Output Approach to measure GDPThe sum of outputs in the primary sector, secondary sector, and tertiary sector is measured by taking the monetary value of the inputs in a sector subtracted by the costs of inputs in that sector.
The main problem of this is with goods that overlap between sectors. Another issue is that it is very hard to conduct. - 3Income Approach to measure GDPSum of income earned from employing every factor of production.
Land→ Rent(R)
Labour→ Wages(W)
Capital→ Interest(I)
Enterprise→ Profit(P)
GDP = R+I+W+P - 4Expenditure Approach to measure GDPThe expenditure approach is a way to measure GDP based on the sum of spending on domestic output in an economy.
GDP = C + G + I + (X-M)
Consumption + government spending + investment + net exports (exports-imports)