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GDP measurement

GDP measurement. What you will learn. What is GDP?. Ways of measuring GDP. output approach. expenditure approach. income approach. Take this challenge. What is GDP ?. xample: In 2002, Hong Kong’s GDP was $1,259.8 billion.

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GDP measurement

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  1. GDP measurement

  2. What you will learn ... What is GDP? Ways of measuring GDP output approach expenditure approach income approach Take this challenge

  3. What is GDP ? xample: In 2002, Hong Kong’s GDP was $1,259.8 billion. Gross domestic product (GDP) is a measure of the total monetary value of _______________________ produced by all ________________________ of a territory or an economy over a specified period of time, usually a year or a quarter. final goods and services resident producing units

  4. What is GDP ? Key Points Parade Gross domestic product (GDP) is a measure of the total monetary value of _______________________ produced by all ________________________ of a territory or an economy over a specified period of time, usually a year or a quarter. final goods and services resident producing units 1. monetary value 2. final goods and services 3. resident producing units 4. a specified period of time

  5. The output approach Key Points Parade In the output approach, the GDP includes the value of ___________ only. Intermediate goods are excluded. final goods To avoid double counting, we use the ___________ method to find the value of final goods. value-added value of input from a previous stage Value-added =______________-___________________ value of output Example double counting

  6. Think zone Q Q The output approach In the value-added approach, we find the ___________ at each stage of production and then sum these ___________. The sum of the ___________ is termed __________________. value-added value-added value-added GDP at factor cost Will output that involves little or no market value be included in GDP? Answer Will the value of unpaid services produced by households for own final consumption be included in GDP? Answer

  7. The expenditure approach _______________________________ GDP = C + I + G + (X - M) Private consumption expenditure

  8. _____________________ _____________________ _____________________ The expenditure approach GDP = C + I + G + (X - M) gross domestic capital formation + Gross domestic fixed capital formation Change in inventories

  9. ____________________________________ The expenditure approach GDP = C + I + G + (X - M) Government consumption expenditure

  10. _________ _________ The expenditure approach GDP = C + I + G + (X - M) - Imports Exports

  11. The expenditure approach GDP = C + I + G + (X - M) In the expenditure approach, we use the ____________ to find the expenditure on any final goods and services. This measure of GDP is termed ___________________. market price GDP at market prices

  12. Q Think zone Q Q Q Q The expenditure approach Is the expenditure on used-goods included in GDP? Answer Is the expenditure on illegal activities included in GDP? Answer Is the expenditure on the purchase of shares included in GDP? Answer Is the expenditure on welfare payments included in GDP? Answer Is GDP at market prices equal to GDP at factor cost? Answer

  13. The income approach GDP measures the ___________ generated from production. total income

  14. Q Supply final goods and services Household Firm Supply factor services Take this challenge Are the GDP figures obtained by using the three approaches the same? The basic ___________________ can illustrate this. circular flow model Suppose the total output of all firms is valued at $100. expenditure: $100 revenue: $100 income: $100 cost: $100 real flow money flow

  15. Q Supply final goods and services Household Firm Supply factor services Take this challenge Are the GDP figures obtained by using the three approaches the same? The basic ___________________ can illustrate this. circular flow model By the output approach, the GDP is measured as the total revenue created by this flow of final goods and services. expenditure: $100 revenue: $100 GDP =______ $100 income: $100 cost: $100 real flow money flow

  16. Q Supply final goods and services Household Firm Supply factor services Take this challenge Are the GDP figures obtained by using the three approaches the same? The basic ___________________ can illustrate this. circular flow model By the expenditure approach, the GDP is measured as the total expenditure spent on this volume of final goods and services. expenditure: $100 revenue: $100 GDP =______ $100 income: $100 cost: $100 real flow money flow

  17. Q Supply final goods and services Household Firm Supply factor services Take this challenge Are the GDP figures obtained by using the three approaches the same? The basic ___________________ can illustrate this. circular flow model By the income approach, the GDP is measured as the total income arising from the production of this volume of final goods and services. expenditure: $100 revenue: $100 GDP =______ $100 income: $100 cost: $100 real flow money flow

  18. Q Take this challenge Are the GDP figures obtained by using the three approaches the same? The basic ___________________ can illustrate this. circular flow model So in theory, they should be _________. identical But in reality, their values are _________ as a result of the difficulties in getting perfect data. different

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