Please enable JavaScript.
Coggle requires JavaScript to display documents.
Economic Growth (Purchasing power parties (Big mac index, Converts into…
Economic Growth
Purchasing power parties
Big mac index
Converts into dollars
Helps identify inflation
Determined by relative costs of living and inflation rates in different countries
Allows us to look at the value of different currencies
Nominal GDP
Expressed in monetary terms
Value of goods and services produced in the economy over a period of time
Does not take inflation into account
Other national income measures
GNP - Value of all goods and services produced by domestic businesses both home and abroad
GNI - GDP + I (income generate from overseas)
GDP - Value of goods and services produced in the economy over a period of time
Rates of change of real GDP as a measure of economic growth
Short run - Actual annual percentage change in growth
Long run - An increase in the potential productive capacity in the economy
Real GDP
Takes inflation into account
Real National Output = nominal national output / average price level
Per capita income
Income divided by the number of people in the country
Allows us to make comparisons with other countries and their standards of living
Volume and value
Volume - Looks at the quantity of goods and services produced in a country
Value looks at the monetary worth of the goods and services produced in a country
Total national income
Value of all goods and services produced in a country