The gross domestic product
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GDP is the total value of goods and services produced within a country's borders in a specific time period. It is an accurate measure of the size of an economy and GDP growth rate indicates economic growth. GDP can be calculated through the expenditure approach, which sums total consumption, government spending, investment, and net exports, or through the income approach, which sums what everyone earned. Both approaches should produce the same GDP result.
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Aggregate demand is the total planned expenditure in an economy at a given price level. It is composed of consumption (C), investment (I), government spending (G), and net exports (X-M). Each component is influenced by various economic factors - consumption depends on disposable income and credit availability, investment depends on interest rates and profit levels, government spending depends on public opinion and the state of the economy, and net exports depend on domestic and foreign income and exchange rates. Changes in any component will cause the aggregate demand curve to shift right for an increase or left for a decrease on a graph with real output on the x-axis and price level on the y-axis.
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GDP, GNP, NNI, and other measures are used to estimate total economic activity in a country. GDP measures the total value of goods and services produced within a country's borders, while GNP includes production by citizens abroad. National accounts were developed in the 1930s to systematically track these figures. GDP can be calculated by the output, income, or expenditure approach, but all aim to capture final production values and avoid double counting. While GDP provides a measure of overall economic activity, it has limitations in assessing welfare as it excludes unpaid work and factors like leisure, environment, and income inequality.
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ECON3501CARIBBEAN ECONOMIC DEVELOPMENTUNIT 4 – ECO
ECON3501
CARIBBEAN ECONOMIC
DEVELOPMENT
UNIT 4 – ECONOMIC GROWTH
RESOURCE MATERIALS
Levitt, Kari; Witter, Michael (1996). The Critical Tradition of Caribbean Political
Economy: The Legacy of George Beckford. Kingston. Ian Randle Publishers
Beckford; George (2000) Persistent Poverty; Underdevelopment in the Plantation
Economies of the Third World. UWI Press.
Todaro Michael & Smith Stephen; C. (2011) 11th Ed. Economic Development. Pearson
Education & Addison-Wesley
Bhagwati Jagdish (2004). In Defence of Globalization, Oxford University Press
Blackman; Courtney. (2005). The Practice of Economic Management: Caribbean
Perspective Kingston: Ian Randle Publishers
United Nations- UNDP, Human Development Report. World Bank-World
Development Report
2
ECONOMIC GROWTH
Economic growth has two meanings.
Firstly, and most commonly, growth is defined as an increase in the
output that an economy produces over a period of time based on per
capita. That is, an increase in GDP or GNI per capita.
The second meaning of economic growth is an increase in what an
economy can produce if it is using all its scarce resources.
An increase in an economy’s productive potential can be shown by an
outward shift in the economy’s production possibility frontier (PPF).
3
PER CAPITA STATISTICS
Per Capita is used to refer to a unit or each
person within a population.
A country’s economic growth and comparison
of living standards among countries can be
expressed using GDP per capita or GNI per
capita information.
Per capita GDP or GNP is simply a country’s
GDP or GNP divided by its population.
Using per capita statistics is a better measure
of the well-being for the average person.
Bahamas, The
2019 34,863.70
Puerto Rico
2019 32,873.70
Turks and Caicos Islands
2019 31,353.30
St. Kitts and Nevis
2019 19,935.00
Curacao
2019 19,689.10
Barbados
2019 18,148.20
Trinidad and Tobago
2019 17,398.00
Antigua and Barbuda 2019 17,112.80
Uruguay
2019 16,190.10
Panama
2019 15,731.00
Top 10 countries in the Latin America and Caribbean
region for 2019 based on figures from Worldbank.org
4
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=ZJ-BS
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=ZJ-PR
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=ZJ-TC
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=ZJ-KN
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=ZJ-CW
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=ZJ-BB
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=ZJ-TT
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=ZJ-AG
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=ZJ-UY
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=ZJ-PA
THE PRODUCTION POSSIBILITY FRONTIER
(PPF)
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managerial economics chapter 3 .doc.docx
National income is the total value of goods and services produced within a country in a given period. It indicates the overall health of a country's economy. There are four main methods to measure national income: income method, product method, expenditure method, and value added method.
Monetary and fiscal policies can be used to stabilize the economy during economic fluctuations. Monetary policy, managed by central banks, involves managing money supply and interest rates. Fiscal policy involves government spending and taxation decisions. Both tools can accelerate or moderate economic growth as needed, such as using expansionary fiscal policy during recessions.
managerial economics chapter 3 .doc.docx
National income is the total value of goods and services produced within a country in a given period. It indicates the overall health of a country's economy. There are four main methods to measure national income: income method, product method, expenditure method, and value added method.
Monetary and fiscal policies can be used to stabilize the economy during economic fluctuations. Monetary policy, managed by central banks, involves managing money supply and interest rates. Fiscal policy involves government spending and taxation decisions. Both tools can accelerate or moderate economic growth as needed, such as using expansionary fiscal policy during recessions through increased government spending.
Running head Fundamentals of Macroeconomics 1Fundamentals.docx
Running head: Fundamentals of Macroeconomics
1
Fundamentals of Macroeconomics
2
Fundamentals of Macroeconomics
Week 2 Assignment
ECO/372
Macro Economics is a study which is concerned with the economy as a whole and the level of total output which is also referred to as national income is a very important variable in any economy. National income measures the value of an output produced in an economy over a period of time and the policy makers should be aware of the level of economic activity taking place within the country on behalf of the nationals.
One of the most important objectives of the government is to increase the level of the rate of economic growth which is possible only be measuring the national income. The main uses of the national income statistics are:
1. It shows the current allocation of resources,
2. It helps the government in economic planning,
3. It helps measures the country’s standard of living, and
4. It helps in the comparison of the living standard between different countries.
There are some important concepts of National Income such as Gross Domestic Product, Gross National product, net National product and The GDP per capita.
Gross domestic product: “GDP is the total value of all output produced using resources located within the economy over a given period of time”. It refers to the market value of all final goods and services produced within a country in a given period (O'Sullivan, Arthur).
GDP measures the annual value of all economic activity taking place within the economy and the GDP measures are on a value added basis in order to avoid the problem of double counting. There are three ways of calculating the GDP but the results of all the three methods should be the same. They are:
· The Output Method.
· The Income Method.
· The Expenditure Method.
Nominal GDP: Also known as the money GDP is measured in terms of the prices operating in the year in which the output is produced. it is sometimes referred to as GDP at market prices. It can give a wrong impression about the performance of the economy, because of the changes in the value of money which depends on the price level, which is subject to changes. Normally the Nominal GDP converted into Real GDp which is a measure of adjustment for inflation is used to calculate the National performance. Real GDP therefore is: money GDP/ the price index of the current year X Price index of the base year or money GDP/ GDP deflator of the current year X Price index of the base year (HM Treasury, Background information on GDP and GDP deflator).
Unemployment rate: Employment is the total number of people with a job which includes the employees, businessmen and self employed people. The number employed may change over time due to many factors. While unemployment refers to those people who have registered, able, available and willing to work at the going wage rate at any suitable job but cannot find employment. Unemployment is measured at a point of time and.
IJSRED-V2I1P14
The document analyzes the evolution of economic growth in the Democratic Republic of Congo from 2010 to 2014. It finds that while recovery measures were implemented to stabilize the economy after years of turmoil, fundamental imbalances remained that slowed growth. The period from 2010-2014 marked a new era of economic reforms and stabilization with international openness after political instability and disruption. However, economic mismanagement distorted fiscal and monetary cycles, leading to currency devaluation, financial collapse, and high inflation that paralyzed investment. Going forward, authorities must promote long-term private investment and ensure growth benefits all Congolese.
Economics 7
National income is a measure of the total value of goods and services produced in an economy over a period of time, usually one year. It can be measured as the total income earned from production or the total spending on production. There are several definitions of national income but they generally refer to it as the total output or income of a nation. National income is commonly measured using Gross Domestic Product (GDP), Gross National Product (GNP), Net Domestic Product (NDP), and Per Capita Income (PCI). It is calculated using the Product Method, Income Method, and Expenditure Method by considering factors like consumption, investment, government spending, and trade flows.
How do we compare different countries
There are several useful ways to compare countries, including population size, GDP and GDP per capita, trade balance, Human Development Index, and the Demographic Transition Model. GDP is one of the primary indicators used to measure a country's economy and represents the total monetary value of all goods and services produced over a period of time. The Human Development Index, calculated by the UN, provides a more comprehensive view by also considering factors like life expectancy, education levels, and GDP per capita. The Demographic Transition Model outlines four stages of population growth and decline based on birth and death rates.
Why do countries with high GNI and GDP are attractive for foreign in.pdf
Why do countries with high GNI and GDP are attractive for foreign investment?
Solution
Let us first understand what is a GNI and GDP
The gross national income (GNI) is the total domestic and foreign output claimed by residents of
a country, consisting of gross domestic product (GDP) plus factor incomes earned by foreign
residents, minus income earned in the domestic economy by nonresidents
Gross Domestic Product (GDP) is the broadest quantitative measure of a nation\'s total economic
activity. More specifically, GDP represents the monetary value of all goods and services
produced within a nation\'s geographic borders over a specified period of time.
The gross domestic product (GDP) is one of the primary indicators used to gauge the health of a
country\'s economy. It represents the total dollar value of all goods and services produced over a
specific time period; you can think of it as the size of the economy. Usually, GDP is expressed as
a comparison to the previous quarter or year. For example, if the year-to-year GDP is up 3%, this
is thought to mean that the economy has grown by 3% over the last year.
Measuring GDP is complicated (which is why we leave it to the economists), but at its most
basic, the calculation can be done in one of two ways: either by adding up what everyone earned
in a year (income approach), or by adding up what everyone spent (expenditure method).
Logically, both measures should arrive at roughly the same total.
Both the factors reflects the following ; and are most important in attracting foreign investments
In other words ,it determine the health of the any given economy ,and therefore is an important
yardstick to assess and measure and invest.
national income ,GNP, GDP, NOMINAL AND REAL INTEREST RATES& PPP'S
National income refers to the total money value of all final goods and services produced within a country in a given year. It is used to measure the overall economic activity and standard of living in a country. GDP is a key measure of national income and is defined as the total market value of all final goods and services produced within a country in a given period of time. GDP can be calculated using the expenditure approach, income approach, or output approach and includes consumption, investment, government spending, and net exports. While GDP is a useful measure, it does not account for all factors that affect economic well-being such as leisure, environmental quality, and non-market activities.
National income(Engineering Economics and Management-EEM)
This Powerpoint Presentation is about the Economy of India and its all termns covered by National Income
Gross Domestic ProductErskine S. Walther, Ph.D.G.docx
Gross Domestic Product
Erskine S. Walther, Ph.D.
GDP: Defined
GDP: The market value of all final goods and services produced in an economy in a specific period of time.
Market Value: The measurement is in current prices, this known as Nominal GDP or just GDP.
Final Goods and Services: Goods and services that have reached their final usage. They are not used to produce another good or service. Goods that are used in that way are Intermediate Goods.
Intermediate Goods and Services are those that are used as inputs into the production of other goods and services. There are not directly counted in GDP as their value is included in the value (price) of the final goods and services. Thus, counting them directly would double count the same output. However, if the intermediate good has not been sold, it is counted in GDP as inventory.
GDP Defined: continued
Specific Period of Time: GDP can be computed for a month, a quarter or a year. The most common measures are annually and quarterly.
Formal, Legal Markets: Only goods and services that are traded in formal, legal markets are counted in GDP.
Underground Economy: The underground economy is composed of economic transactions involving activities that are not legal activities in a given society. These are not included in GDP. Illegal drugs and illegal gambling are common examples.
Informal Economy: These are legal activities that do no go through formal markets. They are not included in GDP. Income not reported for taxation purposes or work done for barter are examples of informal economic activities.
Some authors include legal activities as part of the underground economy definition.
GDP Defined: continued
Household Production: Productive activities done in and for the household are not counted in GDP as there is no direct monetary payment for such activities. (If you give children an allowance for household chores that would be part of the informal economy. If you clean your own home, that is household production.)
Leisure Activities: Leisure activities that do not involve the purchase of goods and services are not counted in GDP.
Spending an afternoon with family and friends that does not involve buying goods or services would not be counted in GDP as no economic transaction has occurred.
A vacation involving paid activities does count in GDP as goods and services are purchased.
GDP: Purpose
The Purpose of GDP is to measure the total output of goods and services in any economy during a specific period of time.
GDP is Value Neutral: It makes no judgments regarding product quality or whether or not a good or service is “good” for you. Those judgments are left to the consumer who is assumed to be able to make intelligent decisions that reflect their own personal tastes, preferences and values.
Changes in GDP measure economic growth.
Economic growth is the increase in the output of goods and services in an economy over a specific period of time. This must b ...
Macro economics
This document provides an overview of key concepts in macroeconomics. It defines macroeconomics as dealing with the performance and structure of an economy as a whole, rather than individual markets. It discusses important macroeconomic variables like output, income, unemployment, inflation, aggregate demand and supply. It also covers concepts like the consumption function, national income, GDP, GNP, economic growth, and the limitations of macroeconomic analysis.
Macroeconomic environment ppt babasab patil
This document provides an overview of macroeconomics and key macroeconomic concepts. It defines macroeconomics as the study of the overall averages and aggregates of an economy as a whole. The document outlines the scope, importance, objectives, and instruments of macroeconomic policy, including fiscal policy, monetary policy, and others. It also defines basic macroeconomic concepts such as stocks, flows, and different economic systems including capitalism, socialism, and mixed economies. The document discusses economic planning through five-year plans and the national budget. It concludes by defining important economic indicators used to measure and analyze the macroeconomy, including GDP, GNP, national income, unemployment, inflation, and more.
Macro economic: the data of macroeconomic (mankiw)
This document discusses key macroeconomic indicators used to measure economic activity. It begins by explaining that GDP measures the total value of final goods and services produced domestically in a given time period. GDP can be calculated based on income, expenditure, or production approaches. The chapter also discusses how GDP is adjusted for inflation to derive real GDP and the GDP deflator. Additionally, it explains that the CPI measures price changes in consumer goods and the unemployment rate is calculated based on labor force surveys distinguishing between employed, unemployed, and those not in the labor force. In conclusion, it notes the transition from economic statistics to economic models.
INTERNATIONAL TRADE AGREEMENT CHAPTER 2.ppt
The document discusses international trade and the gravity model of trade. It begins by stating the learning goals which are to describe how trade depends on country size and explain reasons for this, discuss how distance and borders reduce trade, describe fluctuations in trade over time, and explain changes in traded goods/services.
It then introduces the gravity model of trade, which predicts that trade between two countries is proportional to their GDPs and diminishes with distance. Large countries trade more due to larger incomes and production of various goods. The model is supported by empirical evidence and approximates actual trade data well.
INTERNATIONAL TRADE AGREEMENT CHAPTER 2.ppt
The document discusses international trade and the gravity model of trade. It begins by stating the learning goals which are to describe how trade depends on country size and explain reasons for this, discuss how distance and borders reduce trade, describe fluctuations in trade over time, and explain changes in traded goods/services.
It then introduces the gravity model of trade, which predicts that trade between two countries is proportional to their GDPs and diminishes with distance. Large countries trade more due to larger incomes and production of various goods. The model is supported by empirical evidence and approximates actual trade data well.
Macro.economics by.. Shahi Raz Akhtar
Macroeconomics is the branch of economics that studies the whole economy on a large scale. It examines factors such as unemployment, inflation, and economic growth. While concepts in macroeconomics have been studied for a long time, the term itself was coined in 1933. John Maynard Keynes is often credited with developing early macroeconomic theories to model and describe the behavior of the entire economy. Today, macroeconomics remains a dominant focus in economics, especially regarding investment and financial markets.
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ECON3501CARIBBEAN ECONOMIC DEVELOPMENTUNIT 4 – ECO
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Running head Fundamentals of Macroeconomics 1Fundamentals.docx
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Why do countries with high GNI and GDP are attractive for foreign in.pdf
Why do countries with high GNI and GDP are attractive for foreign in.pdf
national income ,GNP, GDP, NOMINAL AND REAL INTEREST RATES& PPP'S
national income ,GNP, GDP, NOMINAL AND REAL INTEREST RATES& PPP'S
National income(Engineering Economics and Management-EEM)
National income(Engineering Economics and Management-EEM)
Gross Domestic ProductErskine S. Walther, Ph.D.G.docx
Gross Domestic ProductErskine S. Walther, Ph.D.G.docx
Macro economic: the data of macroeconomic (mankiw)
Macro economic: the data of macroeconomic (mankiw)
The gross domestic product
- 1. GROSS DOMESTIC PRODUCT The Gross Domestic Product (GDP) And Its Importance:Gross Domestic Product (GDP) is one of the most widely used measures of an economy’s output or production. It is defined as the total value of goods and services produced within a country’s borders in a specific time period – monthly, quarterly or annually. GDP is an accurate indication of an economy's size, while GDP per capita has a close correlation with the trend in living standards over time, and the GDP growth rate is probably the single best indicator of economic growth. As Nobel laureate Paul A. Samuelson and economist William Nordhaus put it, “While GDP and the rest of the national income accounts may seem to be arcane concepts, they are truly among the great inventions of the twentieth century.” Here’s why. GDP Calculations :GDP can be calculated either through the expenditure approach (the sum total of what everyone in an economy spent over a particular period) or the income approach (the total of what everyone earned). Both should produce the same result. A third method – the value-added approach – is used to calculate GDP by industry. Expenditure-based GDP produces both real (inflation-adjusted) and nominal values, while the calculation of income-based GDP is only carried out in nominal values. The expenditure approach is the more common one and is obtained by summing up total consumption, government spending, investment and net exports. Thus, GDP = C + I + G + (X – M), where C is private consumption or consumer spending; I is business spending; G is government spending; X is exports, and M is imports.