What is meant by 'value added'?
Distinguish between nominal and real national income.
Define GDP per head.
Calculate the real growth rate for a country, as an annual %, if in a given year the value of nominal income rises from $800b to $850, and the index of inflation rises to 104 during that year - assume it started the year at 100.
Look at the following data
Consider the data of the National Income, inflation and population of a hypothetical economy.
|YEAR||NOMINAL GDP $B||INFLATION INDEX||POPULATION (M)|
What is the base year?
What was the value of Y in real terms in 2012 compared with the base year?
Calculate real Y per head in 2011.
Describe and comment on the state of the economy in 2012 in comparison with 2010.