Measuring Economic Performance

Front

What is National Product?

Back

Total production of goods and services (G&S) in the economy.

Front

How is National Product related to the PPC model?

Back

Shifts of the PPC resemble economic performance.

Front

What does Gross Domestic Product (GDP) measure?

Back

Total market value of all goods and services produced in the economy in a given period.

Front

What are the three main components of GDP measurement?

Back

Expenditure, Income, and Production/Output.

Front

What is the formula for calculating GDP using the Expenditure Method?

Back

C + I + G + (X - M) where C = Consumption, I = Investment, G = Government Expenditure, X = Exports, M = Imports.

Front

What does GDP not measure?

Back

Intermediate goods, non-current production, non-productive financial transactions, illegal transactions, and non-market transactions.

Front

What is Gross National Product (GNP)?

Back

Market value of all goods and services produced anywhere in the world using local resources.

Front

What is the difference between GNP at Factor Cost and GNP at Market Price?

Back

GNP at Factor Cost is based on the cost of resources, while GNP at Market Price includes taxes.

Front

What is National Income?

Back

The sum of all incomes of all productive resources owned by the household sector.

Front

What are the components of National Income?

Back

Compensation to Employees, Rental Income, Net Interest, Profit, and Proprietor’s Income.