2. GDP
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Gross Domestic Product
(GDP).
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Used to measure the health of a
countries economy.
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The total market value of all
final goods and services
produced in a country equal to
the total consumer investment
and government spending plus
the value of exports minus the
value of inputs
•
Irelands GDP (2012)
210.4 Billion
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(www.cliffsnotes.com
(www.investorwords.com)
3. Real GDP
• Real GDP otherwise known as the current GDP is the
measurement of economic output of a country minus the
effect of inflation.
• This give a more accurate account of the economies
production per quarter.
• Real GDP is what nominal GDP would have been if there
was no price changes from base year.
• Real GDP takes into account inflation.
(www.useconomy.about.com)
4. GNP
• GNP (Gross National product)
• GNP is the total value of goods and services produced in a
country in a particular year, plus income earned by its
citizens including income of those living abroad, minus
income of non residents in that country.
• Consumption + Government Expenditures
+ Investments + Exports + Foreign Production by National
Companies – Domestic Production by Foreign Companies
= Gross National Product
(www.investorwords/2186/GNP.html)
5. GDP per capita
It’s an estimation of the value of goods produced per person in
the country equal to the countries GDP divided by the total
population of the country.
For Example….
Irelands GDP per capita in 2012 is
$42,600
This helps you compare countries at a smaller scale judging it by
people rather than the country as a whole
6. Net Factor Income
• Used to differentiate national income from domestic income
• The difference between GDP and GNP
• Net factor income in Ireland is negative due to large
profit repatriations by multinationals
(readyratios.com)
8. Foreign Direct Investment
• FDI (foreign direct investment)
• There are 1,033 foreign companies in Ireland
• Google, Dell and Microsoft are some examples
• The money earned by these companies will most likely leave
Ireland
• Artificially high GDP
(www.idaireland.com)
9. Errors and Omissions
• Errors in calculations
• Black market
• Trade by barter
• Self sufficient
(ingrimayne.com)
(news.bbc.co.uk)
10. Disasters
• Disasters (war) (natural disasters)
• Disaster related mortality is a growing economic concern in
the Asian countries. These deaths are hypothesized to have a
significant impact on per capita gross domestic Product
(GDP) of the countries.
• Gross investment and life expectancy on economic growth of
Pakistan, while there is a negative impact of arable land, net
exports and labor force on GdP per capita.
• Example: Earthquake in Pakistan in October 2005.
11. Ignores Income Distribution
• HDI (Human Development Index)
• A small amount of people in a country own all of the wealth
(eg. Qatar)
12. Different countries have
different needs
•Where countries spend their money
•Israel spend a lot of money on weapons and security
•Germany spend money on infrasture, health systems, etc.
13. Longer working weeks and less
holidays
• Impact of longer working weeks and less holidays
• GDP can rise due to people working longer hours and less
time off as this is good for the economy but not necessarily
good for the workers as they wouldn't be as happy
• Standard of living and quality of life
(www.businessnewsdaily.com)
14. The Black Economy And
Non-Monetised Sectors
GDP figures might understate the true living standards because of the existence
and growth of the black economy. The black economy includes economic activity
that goes unrecorded by the Inland Revenue and Customs & Excise. The nonmonetised sectors of the economy include output that is not sold at market
prices but involves barter trade, and self-consumed products.
•
The Economist's latest estimates for the total value of the black economy
throughout the world is $9 trillion. The scale of the underground economy is
estimated to average 15% of national output for rich economies and 33% of
national output for emerging economies.
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Fuel tobacco digital entertainment and drugs.
