Chapter 31: Economic Growth

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  • Created by: Sin Heng
  • Created on: 29-01-20 14:01
  1. GDP is a key measure of national income used in the UK. What are the other measures used? 

  • Gross Value Added (GVA) at basic prices  

  • Gross National Product (GNP) at market prices 

  • Gross National Income (GNI) at market prices 

  • Net National Income at market prices  

 

  1. What is the difference between nominal and real values? 

Nominal values are measured at the prices of the day without including the effect of inflation on the data. Whereas, real values are prices that have been adjusted for inflation over a period of time. 

 

  1. How do you find the national income per person and why do we use it? 

National Income / size of population 

We use it as a measure of output, expenditure and income of an economy. This makes it easier for economists to predict changes in the economy and to make comparisons of economic welfare over time and between countries. 

 

  1. What are transfer payments and what is an example of it? 

The incomes excluded from the final calculations of national income. Such as, people abroad who send money to their families back home. The family does not work for that money and so it is not accounted for in national income. 

 

  1. What are the problems with comparing national incomes over time? 

  • Prices 

  • The accuracy and presentation of statistics 

  • Changes in population 

  • Quality if gods and services 

  • Defence and related expenditures 

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