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Economic Growth - Coggle Diagram

- - - - Wages (W)
      - Rent (R)
      - Interest (I)
      - Profits (P)
  - - - Consumption Expenditure (C)
        
        All expenditure on goods and services on final goods by households
      - Investment Expenditure (I)
        
        Investments in capital (buildings and machinery) and changes in inventories of raw materials, semi-finished goods and unsold finished products
      - Government Expenditure (G)
        
        Government expenditure on final goods and services, but excludes transfer payments (pensions, social security payments)
      - Net Exports (X-M)
        
        Import expenditure by foreign sector subtracted from export revenue earned from sales of goods and services abroad
- - - - The market prices prevailing that time period
      - E.g. Nominal GDP in 2010 shows the total value of final goods and services produced in the country in 2010 valued at 2010 prices
    - - Market prices that are adjusted to inflation
      - Real GDP(Yr1) = Nominal GDP(Yr1) x
        Consumer Price Index(Yr0)/Consumer Price Index(Yr1)
      - Yr 0 is the base year (the year we take of the prices)
- - - - Comparing to other countries' GDP (Difference in exchange rates). Btr to use PPP
      - Distribution of income not taken into account
      - Size of underground economy
      - Diff sources of statistical data
      - Spending of money on (Defence will not affect SOL)
      - Difference in accounting procedures, habits
    - - Changes in GPL, thus using real GDP btr
      - Population Growth, thus using GDP per capita btr
      - Unequal Income Distribution (Seen from Gini Coeff)
      - Production =/= Consumption (Increase in I of Capital does not affect on SOL)
      - Environmental Degradation, Resource Depletion
      - Non-Material SOL not taken into account
        
        Literacy Rates
        
        Life Expectancy
        
        Infant Mortality Rates
        
        Leisure Time
    - - Non-Inclusion of Non-Market Activities
      - Non-Inclusion of Underground Economy