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Questions tagged [gdp]

Gross Domestic Product (GDP) is a flow measure of the value of finished goods and services produced within a country's borders in a specific time period. GDP is typically calculated on an annual basis.

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Why are “transfer payments” not part of GDP?

It is well-known that transfer payments are not counted in GDP (e.g. wikipedia 1 and wikipedia 2). For instance, exercise 2.c in Chapter 2 of Jones book's Macroeconomics ask to calculate how much GDP ...
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Help please, I cant work out this equation [closed]

. In 2012, the imaginary nation of Platland had a population of 10,000 and real GDP of 42,000,000. During the year its real GDP per person grew by about 1.94%. Which of the following sets of growth ...
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Why is the consumption line and 45degree line's intersection not the equilibrium income level?

The question is as below The answer is A. I understand why it is A, but do not understand why it isn't C. Doesn't the point where the consumption line and 45 degrees line intersect represents the ...
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How much does one percent of unemployment 'cost'? (Unemployment elasticity)

There is always debate that increasing minimum salary will pour in more money into the budget as those who get minimum salary will spend them immediately. The counter argument is that increasing ...
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Why doesn't anyone talk about GNW (Gross National Wealth)?

I just noticed a very interesting fact. GDP of the United States: $18.5B GDP of China: $11.4B If we look at national wealth... GNW of the United States: $84.8B GNW of China: $24.1B The margin ...
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Why the GDP does not decrease even when we are saving from our income?

When we are saving from our income then we don't consume as mush as we earn. So the GDP should decrease as well as the income but this does not happen. Why?
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Explain inflation to an economic novice

I'm trying to get a grasp on how exactly inflation works. What I've read so far seems to be contradictory. In some articles I've read that government spending is always(?) inflationary, and in ...
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What's the difference between gross fixed capital formation and gross private domestic investment?

Cited from Wikipedia, we know: Gross private domestic investment is the measure of physical investment used in computing GDP in the measurement of nations' economic activity. This is an important ...
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Profit for business owners vs. incomes of the self employed

I am learning the way to calculate GDP with incomes. So there is labor income and capital income. One element of the labor income is incomes of the self-employed. And for Capital income, an element ...
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404 views

How does borrowed money affect GDP?

Suppose that a household borrows from the bank with %2 interest rate and uses the money for paying rent; Is this a Consumption? May households borrow money from the bank for consumption, not ...
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1answer
128 views

Conversion of GDP PPP International \$ 2005 into GDP PPP International \$ 2011

Essentially I have two different datasets that I'm trying to consolidate. One set of data comes from the World Bank Databank, and is a set of historical GDP PPP values for all countries expressed in ...
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Can CPI and real GDP have high correlation?

I have historical data where the CPI and GDP are correlated. Does this make sense? If not, how do I test for it?
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What is a supply side shock in macroeconomics?

I was hoping someone could clarify what exactly is meant when someone refers to a country as having undergone a 'supply-side shock' and generally speaking when one is evaluating the health or growth ...
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Is population growth irrelevant with respect to per capita GDP growth

In Solow's growth model the growth rate of the output or GDP of a country is denoted by $g$. In the model this can be decomposed to $$ g = g_l + g_k, $$ where $g_l$ is the growth rate of the effective ...
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GDP per industry and per region in Europe

I'm looking for a breakdown of GDP per region and industry in Europe. Do such data exist, ideally in the public domain? I'm looking for a breakdown of GDP per region and industry in Europe. Do such ...
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Is a country in economic downturn if its growth rate is negative, but improving?

As I understand it, economic downturn means that economic growth is significantly slowing down or entering into recession. (If anyone wants to correct me, please do so). i.e. Growth rate is decreasing....
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While calcluating GNP, the overall income of a citizen working abroad is considered or only his/her remittances?

Suppose a citizen of Country A is working in Country B with income X USD, and he sends Y USD as remittance to A, what is considered while calculating GNP? X or Y? (X is inclusive of Y)
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Domestic Demand, Private Consumption, Public Consumption, Gross Fixed Investment Relationship

I'm reading the IMF's January 2016 Report on Sweden's Economic Indicators, and the top section has the following: Domestic Demand (2012) Percent Change: -0.6 Indented below are: Private ...
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GDP computation

Lets say a fashion designer charges £5,000 for each cloth that she makes. The fashion designer pays her shop apprentice £500 per cloth made in return for sweeping the floor and other chores, and ...
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Why was protectionism considered bad in the great depression?

its said that "there is all-but-universal agreement that the adoption of restrictive trade policies was destructive and counterproductive and that similarly succumbing to protectionism in our current ...
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GNP v. GDP as a true measure of national vibrancy [closed]

Is the GNP a more realistic number or measure of national economic vitality regarding its citizenry/residents of the nation in question versus the GDP?
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If a retailer consumes a good he bought from the producer, does that get accounted into the GDP of a nation?

Let's say we have a soft-drinks store. Say the store sells Pepsi and Coke. If the retailer drinks a bottle of coke from his own store, does that get counted into the GDP of a nation? Or is it only ...
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Are goods that are wasted counted into the GDP of a nation?

If x apples are produced in an economy, and only x - y are consumed (y apples get rotten at different stores in the country), is the value of these wasted apples considered as a part of GDP?
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Do the donated NFL losing team shirts destroy local economies?

I've recently become aware of the fact that the NFL prints both championship teams' shirts in advance to satiate incredible demand -- but instead of destroying the losing teams' shirts like they used ...
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1answer
177 views

Debt-to-GDP or Debt-to-Revenue?

Which is a better measure of the health of an economy between Debt-to-GDP and Debt-to-Revenue? Why?
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What is the difference between aggregate supply and GDP?

Usually when I read online, I see the following repeated frequently: aggregate demand is equal to GDP. I understand that aggregate expenditures is the aggregate demand at a particular price level, and ...
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What is the relationship between inflation and imports/exports?

According to the aggregate demand curve, when the price level is higher, the real GDP demanded is lower. One of the explanations given is a consequence of the Mundell-Fleming model: "As the price ...
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What would the determinant of the input-output matrix represent? What is the intuition?

I know that the determinant of a 2x2 matrix represents the oriented area of the parallelogram represented by the vectors in the matrix. For 3x3 or higher order matrix it represents the oriented volume....
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Using trade data in current dollars with GDP in real dollars

I am trying to calculate trade/GDP ratios for countries using two sources: (1) Maddison's historical GDP series (which gives GDP in Geary-Khamis 1990 dollars), and (2) a dataset which reports trade ...
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Can a closed economy flourish?

I was wondering if it is possible to run a country based only on domestic economy and not to enter the world economy. Basically, if certain economy of a certain country fails and poses threat to world ...
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1answer
267 views

How does an import driven economy function?

Can a country's economy,where everything is imported from other countries, solely depend on the income from its retail industry?
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Is there anything like ratio between number of manufacturing industries to number of retail shops?

In my country there are very few manufacturing factories,but large numbers of small retail shops (like one shop per house or may be even more). What are the effects in the economy of a country for ...
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1answer
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If we add up all the income while finding GDP of a country, is income counted multiple times?

Suppose 9 others and I are government employees. We get salary which will be counted while calculating GDP. Let's assume that we 10 are the only customers of a shop (for simplicity). The shopkeeper's ...
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Why use the income approach to approximate GDP if it relies on the value produced by the expenditures approach?

To preface, I'm taking a macroeconomics class and we're learning about measuring GDP. The textbook says that there are two main ways to measure GDP: the expenditures method and the income method. The ...
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How to measure GDP in practice?

You can find many explanations of theoretically how GDP is measured. But how is it done in practice? Is it estimated by extrapolating from small samples of activity or can the overall value be ...
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268 views

How to calculate constant GDP in international $ from nominal GDP in local currency units

I want to calculate a constant GDP serie from 1995 till 2014 based on nominal GDP expressed in Yuan (Chinese currency). I already get stuck on how to first make a constant GDP serie based on Yuan, ...
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Is there an alternative metric to GDP that measures a country's assets rather than flows?

The Gross domestic product measures the value of all final goods and services produced in a period. This has some limitations. For example, if a car hits a lightpost and both need to be repaired and ...
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In what sense is economic growth cumulative?

In my economics syllabus, one of the student competences is to "Show the cumulative nature of growth and measure average and annual rates of growth". What I don't understand is how a country's GDP ...
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GDP/PPP influence - Adjusted savings: carbon dioxide damage

I found this variable and I'm not a native english speaker, so I'm a little bit confused with "adjusted savings" right in front of "carbon dioxide damage". I'd like to know what does this variable ...
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Understanding Tertiarization of the Economy

Trying to understand some of the core mechanics of tertiarization in developed economies. According to the WorldBank, "As incomes continue to rise, people’s needs become less “material” and they ...
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Questions on comparing GDP between various countries

What is the difference between OER vs PPP? What fundamentally drives them? Shouldnt an arb opportunity exist and wouldnt that difference then go away? My understanding of OER is the official nominal ...
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What Level of Government Debt to GDP Ratio is Sustainable?

I was reading that Japan has a debt to gdp ratio of 240pc and I cannot understand why this has not left the country "bankrupt"? From looking at this like an ordinary person this level would be ...
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1answer
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Is there a change over the business cycle in how much of economic activity is market-based?

Out of the total production in an economy, a big part is market-based, as when you make something and sell it. But a big part is not, as when you make something and don't sell it, but exchange it or ...
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Calculating Service Contributions to GDP

Trying to get some clarification on how GDP is calculated for service industries. Are input resources netted out (e.g. fuel for an airline), the same way wheat would be for a loaf of bread? What ...
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Why do we change the base year?

Never, never, understood this. I know what Nominal and Real GDP is, I know how the base year calculations work, my question still remains. The idea behind real GDP that makes most sense to me is the ...
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Recommendations for ways to address gaps in GDP data?

I am a biologist that is using GDP data as part of my next research project and I am finding large gaps in the data, both in terms of years and countries. I am wondering what the best practice is for ...
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1answer
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Does the GDP contribution of a service sector represent the gross profits of that sector?

I couldn't find a simple answer to this question: does the dollar contribution of a service sector represent the gross profits of that sector? For instance, the GDP contribution of the financial ...
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1answer
461 views

What is the wealth of a company?

I would like to better understand what is the wealth of a company and what is made of. Is the wealth of a company similar to GDP of country, like a "gross company product" ? As example: can we say ...
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127 views

Why does an increase in money cause a proportionate increase in price level according to classical/neoclassical economists?

First I am not sure what classical economists say but doesn't increase in Money supply decreases interest rate and cause investment to expand and thus GDP rises. Therefore the aggregate demand ...
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Ok to normalize GDP change by population change?

Does it make sense to normalize change in real GDP by the contemporaneous change in population? I'm interested in this calculation for the following reason. Suppose real GDP increases. I'd like to ...