Please enable JavaScript.
Coggle requires JavaScript to display documents.
Key Economic Indicators: National Income (Economic Growth (KEI: Real GDP…
Key Economic Indicators: National Income
Economic Growth
KEI: Real GDP
Real GDP is defined as the total market value of all final goods and services produced within the geographical boundaries of an economy in a given period of time
Economic Growth Rate (year x)
=
Real GDP(year x)- Real GDP(x-1)/Real GDP(x-1) x 100
Nominal GDP:
contains both the price and output component
changes in nominal GDP may be due to inflation
Real GDP= Nominal GDP/GDP Deflator
%Change in real GDP= %Change in nominal GDP- Inflation Rate
Real GDP Per Capita
more useful indicator for comparison between countries with significantly different population sizes
Real GDP per capita = Real GDP/Population Size
KEI: Real GNI
Real GNI= Real GDP+ net factor income from abroad
Differences between GDP and GNI
measures the value of output produced within boundaries of an economy independently of the
nationality of factors of production involved
measure of incomes received by residents of a country independently of the
geographical location of FOPs involved
National Income Statistics
Economic Performance
Uses
measure and compare economic growth
measure the contribution of income to different sectors of economy
Limitations
x Loss of environmental resources
x Loss of environmental quality
x The additional expenditures undertaken for the purposes of cleaning up pollution
SOL
Uses
MATERIAL
Increase in RNY--> Increase in purchasing power--> Increase in quantity and quality of goods and services consumed--> More needs and wants satisfied--> higher mat SOL
refers to the quantity and quality of goods and services available for comsumption
NON-MATERIAL
intagible aspects which enable residents to live an enjoyable and fulfilling life.
Increase in RNY--> Gov can collect more tax revenue--> can be used to devise policies and build better infrastructure and invest more in public and merit goods--> improve non mat SOL
Limitations
MATERIAL
:red_flag:Distribution of income
Gini Coefficient
:red_flag: Composition of income
:red_flag: Population Size
:red_flag:Size of informal sector
:red_flag:Availability of reliable data
:red_flag: Diff in Currencies
PPP
NON-MATERIAL
Leisure hours
Quality of Environment
Access to necessities
Other qualitative aspects