This is a draft cheat sheet. It is a work in progress and is not finished yet.
Interpreting GDP
GDP is a... |
measure of the size of the economy, allowing us to compare among years and countries |
To measure actual changes in aggregate output... |
GDP must be modified for price change into real GDP |
Aggregate Output |
The total quantity of final goods and services produced within an economy |
Real GDP
Definition |
The total value of all final goods and services produced in the economy during a year, calculated as if prices had stayed constant at the level of some given base year in order to remove the effects of price change |
Formula |
Sum of all final goods and services values = (this year's quantity)(previous year's price) |
Chain-linking |
The method of calculating changes in the real GDP using the average between the growth rate calculated using an early base year and the growth rate calculated using a late base year |
GDP per capita |
GDP divided by the size of the population or average GDP per person (does not include happiness, quality of life, income inequality, etc) |
Nominal GDP |
The total value of all final goods and services produced in the economy during a given year, calculated with the prices current in the year in which the output is produced |
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