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Note Macroeconomic - Coggle Diagram
Note Macroeconomic
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Issues with GDP measurement: Somethings that contribute to a good life are left out of GDP (list 4 things). Why we still measure GDP despite its flaws? Because GDP does not directly measure those things that make life worthwhile, but it does
measure our ability to obtain many of the inputs for a worthwhile life. For example, GDP
does not measure the health of our children, but nations with larger GDP can
afford better healthcare for their children. GDP does not measure the quality of
their education, but nations with larger GDP can afford better educational systems. In short, large GDP does in fact help us to lead good lives.
Leisure time: Consider if everyone in the economy began working seven days a week, foregoing weekend leisure. This would lead to more goods and services being produced, and a rise in GDP. However, this increase in GDP doesn't necessarily mean an improvement in well-being, as the value of lost leisure could outweigh the benefits of higher production and consumption.
Non-market activity, such as the childcare a parent provides his or her child at home.
The quality of the environment: GDP increases due to factory expansion, production activities can lead to increasingly serious environmental pollution.
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Discuss the flaws with CPI calculation: Fix the basket => Overstate the cost of living => Cannot completely calculate the estimated cost of livings due to 3 problems
Introduction to new goods: CPI does not reflect the increase in the value of the dollar that arises from the introduction of new goods.
Unmeasured quality change: A good deteriorates from one year to the next while its price remains the same, the value of a dollar falls, because you are getting a lesser good for the same amount of money.
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Explain how the prices of goods and services used in the CPI differ from the prices reflected by the GDP deflator.
The GDP deflator reflects the current level of prices relative to the level of prices in the base year. CPI is calculated by the cost of basket in the base year (those basket use the current price to calculate).
1'st difference: the GDP deflator reflects the prices of all goods and services produced domestically, whereas the CPI reflects the prices of all goods and services bought by consumers.
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Explain what FDI and FPI are. Discuss the possible gains when Korea invests in Vietnam. What does Vietnam gain from attracting FDI and FPI from Korea? In your opinion, which country would be better off in this relationship? Record 2:00:00 - Textbook page 527
Foreign direct investment: A capital investment that is owned and operated by a foreign entity. Foreign portfolio investment: An investment that is financed with foreign money but operated by domestic residents.
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How would economists assess the level of prosperity and the extent of economic progress in a nation? Sách trang 516, Record 1:33:00
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Explain why developing countries like Vietnam would consider a GDP growth rate of 2% a failure
while developed countries like the U.S. would consider such a growth rate a success. Apply Diminishing Returns to answer this
