Economic Growth

• What is the main focus of the video discussed?

  Different measures of national income
• Why are national income statistics useful for governments?

  They provide a report card on economic performance
• What do national income statistics allow governments to evaluate?

  Whether they are meeting economic growth objectives
• How do national income statistics help in forecasting?

  They help forecast expected demand and growth
• What can national income statistics measure regarding living standards?

  Current living standards and their improvement over time
• What is the most commonly used measure of economic growth?

  GDP or real GDP
• What is the definition of GDP?

  Value of all final goods and services produced in a year
• What are the three methods to calculate GDP?

  The income method, output method, and expenditure method
• What is a key benefit of using GDP?

  It measures growth and living standards
• What is a problem associated with using GDP as a measure of growth?

  Risk of double counting in the output method
• What is double counting in GDP measurement?

  Including the value of output in multiple sectors
• How can double counting be overcome in GDP measurement?

  By measuring the final value of goods and services
• What types of informal activities are not included in GDP?

  Black market activity and unregistered work
• Why might GDP be lower than it should be?

  Due to unregistered informal activities
• What is a challenge in accurately measuring GDP?

  Collecting vast amounts of data quickly
• What is a critique of GDP as a measure of living standards?

  It ignores the quality of output produced
• What negative externalities are not included in GDP?

  Costs of pollution and resource depletion
• How does GDP fail to address income inequality?

  It does not consider the distribution of income
• What does GDP per capita measure?

  Average individual incomes in the economy
• How is GDP per capita calculated?

  Real GDP divided by the population
• What is a limitation of GDP per capita?

  It faces the same issues as GDP
• What are remittances?

  Income sent back home by workers abroad
• How do remittances affect GDP calculations?

  They are not included in GDP figures
• What is foreign direct investment (FDI)?

  Investment by foreign firms in a domestic economy
• How can FDI distort GDP figures?

  Income generated may be repatriated abroad
• What is GNI?

  Total income generated by a country's production factors
• How is GNI calculated?

  GNI = GDP + net factor income
• What is the advantage of using GNI over GDP?

  It includes income from domestic workers abroad
• What is green GDP?

  GDP adjusted for environmental costs of production
• How is green GDP calculated?

  Green GDP = GDP - environmental costs
• What is a challenge in calculating green GDP?

  Putting a monetary value on environmental costs
• Why is green GDP politically sensitive?

  It can significantly lower GDP figures
• What is the HDI used for?

  To provide a holistic view of living standards
• What are the key issues with using GDP as a measure of economic growth?

  • Risk of double counting
  • Exclusion of informal activities
  • Errors in data collection
  • Ignoring quality of output
  • Not addressing income inequality
• What are the strengths and weaknesses of GNI as a measure of living standards?

  Strengths:

  • Includes income from domestic workers abroad
  • Excludes foreign direct investment income

  
  

  Weaknesses:

  • Still faces issues present in GDP
  • Environmental costs are not included
• What are the strengths and weaknesses of green GDP?

  Strengths:

  • Accounts for environmental costs of production

  
  

  Weaknesses:

  • Difficult to assign monetary value to costs
  • Politically sensitive due to potential GDP reduction
• How do national income statistics contribute to economic policy?

  • Evaluate economic performance
  • Assess policy effectiveness
  • Forecast future demand and growth
  • Compare living standards internationally
• What are the limitations of GDP in measuring living standards?

  • Ignores quality of life factors
  • Does not account for negative externalities
  • Fails to reflect income distribution
  • Does not measure individual income levels
• What is economic growth defined as?

  An increase in real GDP
• What are the two causes of economic growth?

  An increase in aggregate demand or an increase in LRAS