This paper will discuss Gross Domestic Product (GDP), the differences between nominal GDP and real GDP. We will also explore definitions, advantages and the disadvantages of using Gross Domestic Product per capita as a measurement. This will be illustrated through a graph on nominal GDP and real GDP. The paper provides a combination of economic concepts related to price level, inflation and deflation. The results will show how GDP per capita works and the method used in each Gross Domestic Product component. The goal is to understand how Gross Domestic Product (GDP) is being used within a country’s economy.
We all have played a part in economics. Every day we use economics to determine what to buy and sell. Our economy is a …show more content…
This is a measure of the average GDP per person but is not by itself an appropriate policy goal. There are many advantages and disadvantages for GDP per capita. For example, Gross Domestic Product (GDP) does not account for volunteer work, quality of goods, and GDP can be raised by a disaster. It is hard to determine if consumers are receiving quality goods that do not cause them more money to replace a low-good with a higher-quality good. Replacing goods with like or better products cause. GDP to raise. Also, natural disaster like oil spills or war can cause GDP to raise. It can be a good advantage to people looking to buy home or invest in stocks because it gives a good gage into how the economy is …show more content…
The quality of life is used to evaluate the general well-being of individuals and societies. Quality of life should not be confused with standard of living, which is based primarily on income. Instead, the quality of life includes wealth, employment, physical and mental health, education, etc. For example, while South Africa is in the top 40 countries for highest GDP, over 50% of its people live in poverty, meaning they have a low quality of life because they lack basic human needs such as food, shelter, and access to education and healthcare, etc. Since GDP does not reflect upon the quality of life, it is limited as a measure of welfare”. (p.2)
Summary
In conclusion, we found that there are many concepts of economics. The three aspects are national income, national output, and national expenditure. Moreover, the higher the GDP; the lower unemployment levels, the higher the standard of living, and the higher the investments. Economists are always working on other ways to measure an economy, Gross Domestic Product (GDP) is still the best indicator of a nation 's overall economic health, in spite of its shortcomings. So, a government should have a clear goal to increase the
We all have played a part in economics. Every day we use economics to determine what to buy and sell. Our economy is a …show more content…
This is a measure of the average GDP per person but is not by itself an appropriate policy goal. There are many advantages and disadvantages for GDP per capita. For example, Gross Domestic Product (GDP) does not account for volunteer work, quality of goods, and GDP can be raised by a disaster. It is hard to determine if consumers are receiving quality goods that do not cause them more money to replace a low-good with a higher-quality good. Replacing goods with like or better products cause. GDP to raise. Also, natural disaster like oil spills or war can cause GDP to raise. It can be a good advantage to people looking to buy home or invest in stocks because it gives a good gage into how the economy is …show more content…
The quality of life is used to evaluate the general well-being of individuals and societies. Quality of life should not be confused with standard of living, which is based primarily on income. Instead, the quality of life includes wealth, employment, physical and mental health, education, etc. For example, while South Africa is in the top 40 countries for highest GDP, over 50% of its people live in poverty, meaning they have a low quality of life because they lack basic human needs such as food, shelter, and access to education and healthcare, etc. Since GDP does not reflect upon the quality of life, it is limited as a measure of welfare”. (p.2)
Summary
In conclusion, we found that there are many concepts of economics. The three aspects are national income, national output, and national expenditure. Moreover, the higher the GDP; the lower unemployment levels, the higher the standard of living, and the higher the investments. Economists are always working on other ways to measure an economy, Gross Domestic Product (GDP) is still the best indicator of a nation 's overall economic health, in spite of its shortcomings. So, a government should have a clear goal to increase the