Question

1. What is the definition of Gross Domestic Product (GDP)? Explain each part of the definition (a) How can we measure GDP? (b) What is GNP and how is it linked to GDP? (c) What is National Income and how is it linked to GDP? (d) What is real GDP? How is it measured? Find out the U.S. GDP (in current dollars) and U.S. Real GDP for 1979-2018 and plot them into the same graph. (e) What is GDP deflator? Why is it important? (f) What is the difference between the growth rate of nominal GDP growth rate of real GDP and growth rate of real GDP per capita? What are the determinants of the last one? Find out the growth rate of U.S. Real GDP per capita for 1979-2018 and plot them into a graph.

Answer 1

Answer as taj we can measure aop by three methods: Income approach - adding together somes Expenditure approach - ett fuit ☺ 1 Product approach duet as valuce aded = valute of production - Valle od intermedi Jouds the results from all of the above approaches should be identical. O anp is the gross National product, it is the sum of app and the (NFIFA) Ned factor income from Abroad. Tanp=cop + NFIFA NFIFA ~ the the net of what our people / factors earning in abroad and what we are paying foreigners those are working in our Country o National Income. It is equal to unp Jess the consumption of fixed capited (ie, depreciations National income means the value of goods and services produced by a country during a financial year. It is same as uop.