GDP, GNP, Growth Rate, Exchange Rate, Terms of Trade, Monetary Policy, Fiscal Policy, Unemployment Rate, Age Structure, Population Size, Purchasing Power Parity, Country's Trade Openness, Balance of Trade, Balance of Payments

1. Some Basic Terminologies
1. GDP: Gross Domestic Product
2. GNP: Gross National Product
3. Growth Rate
4. Exchange rate
5. Terms of Trade
6. Monetary Policy
7. Fiscal Policy
8. Unemployment rate
9. Age structure
10. Population Size
11. Purchasing Power Parity (PPP)
12. Country’s Trade Openness
13. Balance of trade
14. Balance of payments
1. GDP: Gross Domestic Product is the total value of all final goods
and services produced within the country’s boundary in a year.
Determining GDP: Production approach, Income approach,
Expenditure approach.
Components of GDP by expenditure approach:
GDP=C+I+G+(X-M)/NX
2. GNP: Gross National Product is an economic statistic that is equal
to GDP plus any income earned by residents from overseas
investments minus income earned within the domestic economy
by overseas residents.
3. Growth Rate:
a) Compound annual growth rate (CAGR): = start value, =
finish value, =number of years.
Year 2001=6.78 billion US$, 2014= Export 33.73 US$
CAGR=13.13% (Excel Calculation)

2. b) Economic growth, the increase in value of the goods and services
produced by an economy (Excel Calculation)
c) Exponential growth
d) Population growth rate, change in population over time
4. Foreign Exchange Regime/Exchange rate: Exchange rate is the
rate at which one currency can be exchanged for another usually
expressed as the value of the one in terms of the other. For
instance, a dollar can be exchange with 77.68 BDT (FY 2014-15).
Comparison of Volatility of Exchange Rates (Coefficient of
Variation)
Time frame Taka/US dollar Taka/
EuroPre-Floating Regime (Jan 2000-May
2003)
0.047 0.101
Floating Regime (Jun 2003-Feb 2006) 0.50 0.069
Floating Regime (Mar 2006-Nov
2008)
0.11 0.076
*Bangladesh adopted a freely floating regime on May 30, 2003 by
abandoning the adjustable pegged system
5. Terms of Trade: A country’s terms of trade measures a country’s
export prices in relation to its import prices.
Improving terms of trade:
If a country's terms of trade improve, it means that for every unit of
exports sold it can buy more units of imported goods. So potentially, a
rise in the terms of trade creates a benefit in terms of how many goods
need to be exported to buy a given amount of imports.
Worsening terms of trade:
Again if a country’s terms of trade worsen, it indicates that a country has
to export more to Purchase a given quantity of imports.

3. 6. Monetary Policy: The process by which the monetary authority of
a country controls the supply of money, often targeting an
inflation rate or interest rate to ensure price stability and general
trust in the currency.
7. Fiscal Policy: Fiscal Policies are government spending and taxation
measures to influences macroeconomic performance-
unemployment, GDP, inflation etc.
8. Unemployment rate: Unemployment rate is the percentage of
the labor force that is unemployed.
Unemployment Rate= (Number of Unemployed/Labor Force)*100
L=E+U, Here L=Labor Force, E=Employed, U=Unemployed
Frictional unemployment, cyclical unemployment, structural
unemployment, natural rate of unemployment.
Labor Force Participation Rate (LFPR): LFPR is defined as the number
of persons in the labor force, given as the percentage of the working-
age population.
LFPR= (Labor Force/Working-age population)*100
>In Bangladesh Labor force participation 15 years and above.
Population aged 15 years and above, by age group and sex (Source:
LFS 2013)

4. 9. Age structure:
For Bangladesh:
>15 and above = Working age population
>General age for job 60, 62 for freedom fighter, 65 for Judiciary
(maximum) and (minimum 15), (above 18 is allowed for heavy work)
Percentage distribution of working age population by sex age group
(Source: Labor Force Survey 2013)

5. >15-29 refers to youth
>30 or above refers to adult
>20-40: highly workable persons
o 0-14 years: 31.62% (male 27,115,731/female 26,311,130)
o 15-24 years: 18.86% (male 14,976,910/female 16,880,807)
o 25-54 years: 38.27% (male 30,608,224/female 34,053,744)
o 55-64 years: 6.12% (male 5,196,932/female 5,150,199)
o 65 years and over: 5.13% (male 4,258,664/female 4,405,404)
(2015 est.)
Source: CIF Factbook (retrieved 09 may, 2016)
10. Population Size:
The night following 14 March, 2011 was considered as the census
night and all people were counted in the place where they had been
staying during the census night. In this census, it was not possible to

6. count the Bangladeshis living abroad and the foreigners were also
excluded from the census.
2011 2001
Sex Enumerated Adjusted Enumerated Adjusted
Total 14,4043697 14,9772352 12,4355263 13,0522591
Male 7,2109,796 7,4980378 6,4091508 6,7731320
Female 7,1933901 7,4791974 6,0263755 6,2791271
Source: Population Census 2011
Bangladesh has 168. 96 Million (July 2015 est.) population size.
The effective population size (Ne) is defined as "the number of
breeding individuals in an idealized population.
For example, say the population size was N = 10, 100, 50, 80, 20, 500
for six generations (t = 6). Then the effective population size is the
harmonic mean.
(Excel Calculation)
11. Purchasing Power Parity (PPP): The exchange rate adjusts
so that an identical good in two different countries has the same
price when expressed in the same currency.
12. Country’s Trade Openness: Trade openness is a measure of
the value of total trade (export + import) as a percentage of GDP.
(Excel Calculation)
13. Balance of trade: The difference in value between a
country's imports and exports. BT=(X-M)
14. RCA:
=(SUM(H2:L2)/SUM(H$2:L$439))/(SUM(N2:R2)/SUM(N$2:R$439))

7. Sum of Export value from 2007 to 2011 of a single product for
Bangladesh= (SUM (H2:L2)
Sum of export value for 2007 to 2011 of all products for Bangladesh=
SUM(H$2:L$439)
Sum of Export value from 2007 to 2011 of a single product for
World= (SUM(N2:R2)
Sum of export value for 2007 to 2011 of all products for World=
SUM(N$2:R$439)
15. RCA growth with mid-point growth rate
=((((L2/SUM(L$2:L$439))/(R2/SUM(R$2:R$439)))-
((H2/SUM(H$2:H$439))/(N2/SUM(N$2:N$439))))/(((L2/SUM(L$2:L$4
39))/(R2/SUM(R$2:R$439)))+((H2/SUM(H$2:H$439))/(N2/SUM(N$2:
N$439)))))*100
RCA=2007
RCA=2011
16. Normalization for Index:
=((F2-MIN(F:F))/(MAX(F:F)-MIN(F:F)))*100
Normalization= (AS5-1)/(AS5+1) result between +1to-1