GDP
- Created by: Imogenbn99
- Created on: 29-11-15 14:48
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- GDP
- Measure of the value of output produced in an economy
- Used to measure economic growth
- Calculated by:
- The income method
- Total of all wages + salaries, profits, rent +interest earned.
- Rewards for factors of production
- No transfer payments/benefits are counted; there is no exchange
- Accurate except for the informal economy
- Total of all wages + salaries, profits, rent +interest earned.
- The expenditure method
- Adds together all final spending on g/s produced in an economy
- Spending by consumers, investment, g speding and net exports.
- The output/ value added method
- Values added at each stage of production
- The most inaccurate due to double- counting
- Values added at each stage of production
- The income method
- The monetary value of all goods and services produced in an economy in a year = GDP
- Nominal GDP
- Face value
- Real GDP
- Constant values compared to a base year (they take inflation into account)
- The informal economy is a big problem
- Measure of the value of output produced in an economy
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