TOPICS
- Define GDP
- Problems (Shortcomings) with using GDP as a Measure of
Social Welfare
- Define and Calculate
- GDP
- National Income (NI)
- NDP
- net investment (In)
- net exports (Xn)
- real GDP
- Define Personal Income and Disposable
Income
OUTCOMES
Use a circular flow
diagram to show the two ways of calculating
GDP
Define and calculate GDP and NI
when given national income data.
Define and give examples of final
goods, intermediate goods, and double
counting.
Differentiate between gross and
net investment.
Define Investment and state what
is included. Explain why changes in inventories are
investments.
Calculate net investment and
explain how it indicates a growing, static, or declining
economy.
Explain why imports are subtracted
to calculate GDP
List and explain the shortcomings
of using GDP as a measure of social welfare.
India's GDP is much
greater than is Switzerland's GDP yet Switzerland has a
higher standard of living. Explain.
After a major natural disaster
(flood, tornado, earthquake) GDP often increases. Is GDP
in this case a good indicator of social welfare?
Explain.
Find real GDP by adjusting nominal
GDP with use of a price index (GDP price index, also
called the GDP deflator) and be able to find the years of
recessions given nominal GDP data.
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