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GDP and GNI (Total v per capital values (Total provide an indication of…
GDP and GNI
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GDP is likely to differ from GNI as income of FOP's usually flows across international barriers thus, income received may be greater or less than the value of output produced
Thus, GNI = GDP + (income received abroad - factor income sent abroad)
Nominal v real values
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Real GNI = measures of income and output int terms of constant prices that prevail in a particular year - real values eliminate the influence of price level changes over time
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3 ways to measure GDP
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Output approach
Adds up the value of each G and S produced in the economy within a year - obtaining the value of all G's and S's = GDP
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