Measuring GDP and Economic Growth 0.0 / 5 ? EconomicsMeasuring GDP and Economic GrowthUniversityNone Created by: Linnea EkbergCreated on: 04-04-16 12:22 Definition of GDP Market value of all the final goods and services produced within a country in a given time period 1 of 18 Final good Item bought by its final user during a specified time period 2 of 18 Intermediate good Item sold by one firm to another firm, to be used as a component of a final good or service 3 of 18 Factors of Production Land (rent), Labour (wages), Capital (interest), Entrepreneurship (profit) 4 of 18 Definition of Net Exports Export-Imports (X-M) 5 of 18 Measuring GDP GDP equals aggregate expenditure and equals aggregate income (Y=C+I+G+X-M) 6 of 18 Depreciation Decrease in the value of a firm's capital that results from wear and tear and obsolescence 7 of 18 Net Investment The amount by which the value of the firm's capital increases. (Gross investment - Depreciation) 8 of 18 Expenditure Approach C+I+G+(X-M) 9 of 18 Income Approach Compensation of employees (W) + Gross operating surplus (P) + Mixed income (M) + (Indirect taxes - Subsidies) 10 of 18 Statistical discrepancy Th gap between the expenditure and income measure of GDP. 0.2% of GDP in 2012 11 of 18 Real GDP The value of final goods and services produced in a given year when valued at the prices of a reference base year 12 of 18 Real GDP per capita in 1962 £8,175 13 of 18 Real GDP per capita in 2012 £26,631 14 of 18 Potential GDP The value of production when all the factors of production are fully employed 15 of 18 Lucas wedge The pound value of the accumulated gap between projected growth rate and Real GDP per capita 16 of 18 Limitation of Real GDP Household production, Underground economic activity, Leisure time, Environmental quality 17 of 18 % of UK GDP in underground economic activity 3.5 to 13.5% 18 of 18
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