PO232 Lecture Notes - Lecture 2: Big Mac Index, Foreign Direct Investment, Purchasing Power Parity
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*both of these measure the size of the country"s economy. *gdp and gni are not the same as wealth! They"re not measures of all of the assets that are owned within the country (for gdp) or all of the assets controlled by the nation (for gni) *per capita gdp and per capital gni divide gdp/gni by the country"s population: if gdp and gni are measures of the size of a country"s economy, the per capita measures the relative wealth of the country. Constant dollars): real/constant adjusts for in ation (prices rising) or de ation (prices falling) Trying to calculate gdp from year to year that takes into account in ation or de ation: measurements in nominal terms/current only use the prices current in that year. Problem you can see that the prices of things change over time. Problem different countries have different currencies (comparing countries)
