Wednesday, February 10, 2016

GDP And Unemployment

Gross Domestic Product (GDP) is the broadest quantitative measure of a nation's total economic activity. More specifically, GDP represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period of time.

Other Info on GDP
Real GDP = P X Q
Nominal = P X Q
The value of output produced in current prices can increase from year to year it is the value. In constant based year prices price doesn't change but quantity does it can increase from year to year.

If you want to measure economic growth use real GDP
If you want to measure Inflation use nominal Real GDP adjusted for inflation
GDP deflator- price index used to adjust from nominal to real GDP

 Formula for GDP Deflator *
In base year always equal 100 In years after base year GDP is greater

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