- 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.
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 2016 compared with the base year?
- Calculate real Y per head in 2015.
- Describe and comment on the state of the economy in 2014 in comparison with 2017.