What are the six main ways countries are compared?
Population statistics
* Geographical statistics
* Social statistics
* Conflict statistics
* Education statistics
* Economic statistics (GDP, labour/workforce stats, average income)
What does GDP stand for?
Gross Domestic Product
What does GDP measure?
The currency value of all final goods and services produced within a country in a given period.
What does GDP show about a country?
It measures a nation’s total income, economic well-being, and economic growth over time.
How is GDP most commonly calculated?
Via expenditures
What are the four components of GDP?
Consumption, Investment, Government spending, and Net Exports.
What is included under consumption?
The amount of goods and services purchased by households.
Does consumption include goods from previous years?
No, it only includes goods produced in the current year.
Give examples of consumption.
Food, rent, clothing, etc.
What counts as investment in GDP?
Spending by businesses on productive resources and purchases of new homes by consumers.
Give examples of investments.
New machines, new factories, research, and increases in inventories.
Give examples of government spending.
Roads, education, military, parks, and public libraries.
What is included under government spending?
Spending by federal, provincial, and local governments on services.
What is the formula for net exports?
Net Exports = Exports – Imports.
What are imports?
Goods we bring in from other countries.
What are exports?
Goods we ship to other countries.
Name five things not included in GDP.
- Intermediate goods
- Used goods
- Underground production
- Financial transactions
- Household production
- Transfer payments
Write the full GDP formula.
GDP = Consumption + Investment + Government Spending + Net Exports.
What is nominal GDP?
GDP that is not adjusted for inflation; it values goods and services at current prices.
What is real GDP?
GDP adjusted for inflation, measured in base-year prices, used to compare growth from year to year.
What does an increase in real GDP indicate?
Economic growth.
What does GDP not measure?
- Income distribution
- Non-monetary output (barter, household work)
- Desirable externalities (leisure, environment)
- Social well-being
Is GDP a direct measure of standard of living?
No, it correlates with but does not measure the standard of living.
