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Lecture 11

STAT141 Lecture 11: GDP vs Economy

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James Muriithi

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Economic growth in a nation can be said to be the positive change in the goods and
services that are produced in a country. It is an important aspect to note that there is variation in
the way the factors of economy contribute to the growth of the GDP. Different factors will have
different impacts on the GDP. The trend of the factors is never uniform. In different years, the
factors will outperform each other with some dragging the system down. For instance, in a
particular year, the level of unemployment might be high while the exports of the countries are
high. The impacts of the two items on the GDP will be different (Ahmed, Cheng, & Messinis,
2010). The following years may have different trends followed by the items. Researchers have
revealed the positive relationship between GDP and the economy of the nations. Per capita
national output is also related to the GDP. It indicates that an increase in the per capita income
will result in an increase in the economy of the nation.
Other researchers have revealed that the primary measure of the national income and the
output of a country is the GDP (Jain & Jain, 2015). The definition of GDP is based on the value
of the prices and services that are produced in a country within a given period. There are many
factors that contribute to the GDP of a country. Unemployment, FDI, exports and imports
performance in the nations play a major role improving the GDP of a nation.
Economic growth in a country can be achieved when the total output increase rate is
greater than the growth rate of the population. The increased population may results to a negative
influence on the GDP if not controlled. Developing countries are associated with scarce
resources and high population growth rate (Kira, 2013). The number of the people who are
unemployed will increase leading to a negative impact on the GDP. Researchers have
contradicted this by stating that the increased population is a major source of labor. Supporting
the negative effects of the increased population, researchers have revealed that the competition
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