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13 Cards in this Set
- Front
- Back
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How do you calculate GDP (Y) using the expenditure approach?
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Y = C + I + G + X - M
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How do you calculate household income?
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Household income (Y) = C + S + T
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How do you calculate national savings?
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National Savings = S + (T - G)
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What are the 7 income categories used in calculating GDP using the income approach?
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(1) Compensation of employees (2) Net interest (3) Rental income (4) Corporate profits (5) Proprietors' income (6) Indirect taxes less subsidies (7) Depreciation
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What is nominal GDP?
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Just a more precise name for GDP when you want to be clear it's NOT real GDP.
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What is real GDP?
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The value of final goods and services produced in a given year when valued at constant prices.
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How do you calculate real GDP using the Base-Year Prices method?
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Choose a base year. Calculate GDP by multiplying quantities by price of that year. For the comparison year calculate real GDP by multiplying quantities by price of the base year
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How do you calculate GDP deflator?
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GDP deflator = (Nominal GDP ÷ Real GDP) x 100
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How do you calculate the Price Index?
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Price Index = ((total dollar expenditure on market basket in the specific year)/(total dollar expenditure on market basket in the base year)) x 100
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How is the real GDP related to the Price Index?
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Real GDP= (Nominal GDP/PI) x 100
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How is Investment in GDP measured?
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I = S + (T - G) + (M – X)
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How do you measure foreign borrowing?
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Foreign borrowing = (M – X)
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Is the GDP deflator the same as the Price Index?
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Yes
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