economic growth
- Created by: Sophie.ellenx
- Created on: 11-04-21 14:29
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- econmic growth - rate of change of output, an increase in the log term productive potential of the country - typically measured by % chnage in real GDP per annum
- gross domestic product - total value of goods and services produced in a country within a year - indicator of standard of living in a country
- real GDP =strips out effects of inflation whereas nominal doesnt
- real values - volume of national income but nominal = value of national income
- real GDP =strips out effects of inflation whereas nominal doesnt
- comparisons - over time and between countries
- purchasing power parities
- gross domestic product - total value of goods and services produced in a country within a year - indicator of standard of living in a country
- gross domestic product - total value of goods and services produced in a country within a year - indicator of standard of living in a country
- real GDP =strips out effects of inflation whereas nominal doesnt
- real values - volume of national income but nominal = value of national income
- real GDP =strips out effects of inflation whereas nominal doesnt
- an exchange rate for 1 currency for another which comapres how much a typical basket of goods in the cuntry costs compared to 1 in another country
- useful in comparing countries - takes into account cost of living - beg mac index
- purchasing power parities
- problems with using GDP to compare standard of living
- inaccuracy of data - ineffiectn collection, black markets, no home-produced services, errors in infaltion rate, take away transfer payments
- inequalities - increase in national income may not increase living standards everywhere
- spending - some types of expenditure eg defece dont increase living standards but will increase GDP
- quality of goods and services - not reflected in price therefore living standards may have increased more than GDP would suggest
- oter factors which involve living standards - eg education
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