MGMT1101 Lecture Notes - Lecture 5: Gdp Deflator, International Monetary Systems, Gross National Income
19 May 2018
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Chapter 5 – Does Size Matter? The Economic
Economic endowments – Natural and Created: General economic characteristics that enter into a
firs preliiary assesset of a outry > as potetial arket for produts or as preferred
location or source of production > include SIZE and ENDOWMENTS (geography)
NATIONAL
INTERNATIONAL
Assessing national economic performance and
country risk
Regulating international trade at multilateral and
regional levels
National financial risk
International monetary system and exchange
rates
Comparing economic systems
Size of a eooy: asi easure of arket potetial for a firs produt.
- Also suggest a diversity of productive human and physical resources
- GNI Gross Natioal Ioe: alue of a atios ioe (related measure is GDP)
- GDP: market value of all final goods and services produced within a country in a given period
of time.
➢ Consumption: Spending on g/s by households with the exception of purchases of new
housing, Spending on education
➢ Investment: Purchase of goods to be used in future production of g/s
➢ Govt Spendings/Purchases: Salaries for govt employees
➢ Net Export: Total X – Total M
➢ GDP = C+I+G+NX (X-M)
➢ Real GDP = production of goods and services valued at constant price
➢ GDP deflator (nominal/real x100) : measures change in nominal GDP that cannot be
explained in real GDP
➢ Inflation in T2 = (GDP Deflator T2 – GDP deflator T1 / GDP deflator in T1) x 100
➢ WHAT DOES IT NOT MEASURE:
• Quality of life – Leisure or How much do citizens work
Happiness, Health (Better off)
• Things that take place outside markets – Produced at home, Child care at home,
volunteer
• Quality of Environment – GDP excludes damage to society
• Distribution of income – Inequality, Fairness and Justice
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Document Summary
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