Question

Measuring the Economy’s Performance For this assignment, you should use the information in the textbook and the information found on the official government website: www.bea.gov/index.htm Based on the information contained in the textbook and on the Web site above, answer the following questions: What does gross domestic product (GDP) tell us? How did GDP change from 2008? What caused these changes? What is real GDP? What was real GDP in 2008 and has it changed since 2008? What was national income (NI) for 2008? What does national income tell us? What is the difference between GDP and NI? How has NI changed since 2008? What caused these changes? What was disposable income (DI) for 2009? What does disposable income consist of? How did DI change from 2008? What caused these changes? Does GDP measure the well-being of society? Why or why not? What was GDP in 2008 (sometimes called GSP) for your state? How does your state rate when compared to other states? Submission Details: Submit a 4 to 6 page Microsoft Word document, using APA style. Name your document SU_ECO2072_W2_ LastName_FirstInitial Submit your document to the Submissions Area by the due date assigned.

Answer 1

Answer:

Q. 1). Gross Domestic Product (GDP):- GDP is the the money value of final goods and services produced during a year within the domestic territory of a country. GDP is one of primary indicator used to gauge the health of nation's economy. It indicates growth in the economy.

Real GDP:- GDP that is computed as per constant prices is called real GDP.

Q. 2) National income (NI):- It is the money value of net flow of final goods and services produced in a country inclusive of net factor income from abroad.

     Difference between national income (NI) and gross develpoment product (GDP):-

i) GDP is sum total of factor incomes generated within domestic territory of a nation, no matter who generates this income - residents or non-residents. National income (NI), on the other hand, is the sum total of factor incomes generated by the residents of a country, no matter where this income is generated- within the domestic territory or in rest of the world.

ii) GDP does not include net factor income from abroad. National income, on the other hand, includes net factor income from abroad.

Q. 3) National Disposable income refers to the net income at market price available to a country for disposal. National Disposable income includes:-

Disposable income = National income + Net indirect taxes + Net current transfers from the rest of world.

Q. 4) Yes, GDP measure the well-being of society. Increase in GDP means increase in the level of welfare of the people. When GDP rises, flow of goods and services tends to rise. In other words, greater availability of goods per person, implying higher level of welfare in the society as whole.