Economics Questions

· GDP = DOMESTIC PRODUCTION

· DEFINITION OF DOMESTIC RESIDENTS OF A COUNTRY = THE CITIZENS + FOREIGNERS WHO LIVE AND WORK WITHIN THE GEOGRAPHICAL FRONTIERS OF A COUNTRY

ALTERNATIVELY EXPRESSED, A COUNTRY’S GDP = C + Ig + G + X-M

WHERE:

C = AGGREGATE CONSUMPTION EXPENDITURES= DURABLE CONSUMPTION EXPENDITURES + NON-DURABLE CONSUMPTION EXPENDITURES + EXPENDITURES ON SERVICES

Ig=BUSINESS INVESTMENT EXPENDITURES + RESIDENTIAL INVESTMENT EXPENDITURES + CHANGES IN INVENTORIES

G=AGGREGATE GOVERNMENT EXPENDITURES=FEDERAL GOVERNMENT EXPENDITURES + STATE GOVERNMENT EXPENDITURES + LOCAL GOVERNMENT EXPENDITURES

X= AGGREGATE EXPORT EARNINGS

M=AGGREGATE IMPORT EXPENDITURES

· DEFINITION OF GDP PER CAPITA =$GDP\POPULATION OF DOMESTIC RESIDENTS IN A YEAR =$16,500,000,000,000\310,000,000 =$52,225 IN A YEAR

· GDP PER CAPITA IS ALSO CALLED AVERAGE INCOME OR PER CAPITA INCOME

· DEFINITION OF GROSS NATIONAL PRODUCT OR GNP: IS DEFINED AS THE TOTAL MONETARY VALUE OF ALL FINAL AND LEGITIMATELY GOODS AND SERVICES THAT ARE PRODUCED BY THE NATIONALS OF A COUNTRY (i.e. the CITIZENS) OF A COUNTRY WHETHER THEY PRODUCE THEM DOMESTICALLY WITHIN THE GEOGRAPHICAL BOUNDARIES OF THEIR COUNTRY OR IN OTHER COUNTRIES IN A YEAR.

· GNP =NATIONAL PRODUCTION

FOR EXAMPLE, AMERICA’S GNP =THE TOTAL VALUE OF GOODS AND SERVICES PRODUCED BY AMERICAN WORKERS AND FIRMS WITHIN THE BOUNDARIES OF AMERICA + THE TOTAL MONETARY VALUE OF GOODS AND SERVICES PRODUCED BY AMERICAN WORKERS AND FIRMS IN OTHER COUNTRIES IN A YEAR.

· DEFINITION OF GNP PER CAPITA =$GNP\POPULATION OF CITIZENS IN A YEAR

· DEFINITION OF CAPITAL STOCK: IS DEFINED AS THE TOTAL MONETARY VALUE OR MARKET VALUE OF ALL THE PHYSICAL CAPITAL STOCK IN A COUNTRY SUCH AS MACHINERY, TOOLS, EQUIPMENT, BUILDINGS, NETWORK OF ROADS, BRIDGES, WATER SUPPLY SYSTEMS, TRANSPORTATION SYSTEMS, TELECOMMUNICATION SYSTEMS, SEWAGE SYSTEMS, ELECTRICAL GRIDS ETC THAT REPEATEDLY PARTICIPATE IN THE PRODUCTION\DISTRIBUTION OF GOODS AND SERVICES IN A YEAR.

· DEFINITION OF CAPITAL CONSUMPTION ALLOWANCES OR CCAS: IS DEFINED AS THE TOTAL MONETARY VALUE OF THE DEPRECIATION COSTS OR “WEAR AND TEAR COSTS” OF THE CAPITAL STOCK OF A COUNTRY THAT AS A RESULT OF ITS REPEATED USE IN THE PRODUCTION AND DISTRIBUTION OF GOODS AND SERVICES IN AN ECONOMY LOSE ITS VALUE DURING A GIVEN YEAR.

· DEFINITION OF NET DOMESTIC PRODUCT OR NDP=$GDP - $CCAs

Equation 1> NDP = GDP- CCAS

Equation 2> GDP = C + I g + G + X-M

Equation 3> NDP = C + I g + G + X-M-CCAs

Equation 4> NDP = C + (Ig-CCAs) + G + X-M

Equation 5>In = Ig -CCAs

Equation 5> NDP = C + In + G + X-M

$NDP < $GDP> $CCAs

· DEFINITION OF NDP PER CAPITA =$NDP\POPULATION OF DOMESTIC RESIDENTS IN A YEAR

· DEFINITION OF NET NATIONAL PRODUCT OR NNP= $GNP - $CCAs

· DEFINITION OF NNP PER CAPITA =$NNP\POPULATION

· DEFINITION OF RATE OF INFLATION = (PRICE INDEX CP - PRICE INDEX PP)\PRICE INDEX PP X 100

· DEFINITION OF RATE OF DEFLATION> SAME FORMULA AS RATE OF INFLATION (EXPLANATION REQUIRED)

· DEFINITION OF RATE OF INVESTMENT = $Ig\$GDP X 100

· DEFINITION OF RATE OF SAVINGS = $S\$GDP X 100

· DEFINITION OF RATE OF EMPLOYMENT =# OF EMPLOYED\# IN LABOR FORCE X 100

· DEFINITION OF RATE OF UNEMPLOYMENT =# OF UNEMPLOYED\# IN LABOR FORCE X 100

· DEFINITION OF RATE OF UNDEREMPLOYMENT =# OF UNDEREMPLOYED\# IN LABOR FORCE X 100