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The total GDP (or Gross Domestic Product), of a country, is indicative of the productivity of its workforce. One can divide the GDP (in dollar amounts, for example) by the population of a country, and find the resulting productivity (in dollars) per person, per year, by this method.
Wiki User
∙ 13y ago
Wiki User
∙ 12y agoReal GDP shows the productivity of an economy if it were at its natural unemployment rate. In other terms it basically shows how much a country could produce in an amount of time if everyone was working at their upmost efficiency and if all of the country's resources were being used efficiently. Real GDP is pretty much impossible to attain but it shows how prosperous a country could be.
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In 2000 year the economy produced real GDP as a 100 and nominal GDP was 100 but in 2001 economy produced 110 so nominal is 110 what is the real GDP and why?
what is GDP in economy
Why do economist say that real GDP should be used to measure growth in an economy and not nominal GDP?
Growth in real GDP is the only true indicator of weather or not an economy is growing.
What is an economy that experiences decreasing real GDP and increasing prices suffering from?
An economy that experiences decreasing real GDP and increasing prices suffering from stagflation.
Define potential GDP under what circumstances does actual real GDP fall short of potential GDP equal potential GDPand exceed potential GDP?
Potential GDP is basically the sum of growth in productivity, growth in labor force, and growth in number of hours worked. In a mature economy like the US, change in number of hours worked is insignificant and often ignored. -Potential GDP is the level of real GDP that the economy would produce if it were at full employment. When real GDP falls short of potential GDP the economy is not at full employment. When the economy is at full employment real GDP equals potential GDP. Real GDP can exceed potential GDP only temporarily as it approaches and then recedes from a business cycle peak.
Why does equilibrium real GDP occur where C plus Ig equals GDP in a private closed economy?
The equilibrium and the real GDP usually occurs where C plus LG equals GDP in a private closed economy because of the balance in trade.
In 2000 year the economy produced real GDP as a 100 and nominal GDP was 100 but in 2001 economy produced 110 so nominal is 110 what is the real GDP and why?
what is GDP in economy
Why do economist say that real GDP should be used to measure growth in an economy and not nominal GDP?
Growth in real GDP is the only true indicator of weather or not an economy is growing.
What is an economy that experiences decreasing real GDP and increasing prices suffering from?
An economy that experiences decreasing real GDP and increasing prices suffering from stagflation.
Define potential GDP under what circumstances does actual real GDP fall short of potential GDP equal potential GDPand exceed potential GDP?
Potential GDP is basically the sum of growth in productivity, growth in labor force, and growth in number of hours worked. In a mature economy like the US, change in number of hours worked is insignificant and often ignored. -Potential GDP is the level of real GDP that the economy would produce if it were at full employment. When real GDP falls short of potential GDP the economy is not at full employment. When the economy is at full employment real GDP equals potential GDP. Real GDP can exceed potential GDP only temporarily as it approaches and then recedes from a business cycle peak.
Why does equilibrium real GDP occur where C plus Ig equals GDP in a private closed economy?
The equilibrium and the real GDP usually occurs where C plus LG equals GDP in a private closed economy because of the balance in trade.
Suppose an economy real GDP is 30000 in year 1 and 31200 in year 2 what is the growth rate of its real GDP?
1.02
What does gpd tell economists about business cycle?
Nominal GDP does not tell much, but real GDP tells a lot. If the real GDP has fallen from one year to another, it means that the economy is in depression. If it grows, it shows that the economy is booming. If there is no change, the economy is stagnant (i.e. it did not grow).
When there are sustained increases in real GDP over time we say that the economy is undergoing?
Economic growth. Since that is basically the definition of a growing economy, steady increase in GDP
Can Real GDP rise at the same time the unemployment rate rises?
as long as a different sector of the economy contributes to GDP by more than was lost from unemployment, real GDP will rise, if only marginally.
Potential GDP is the same as real GDP when?
the economy is operating at full employment. Note: full employment is not the same as zero unemployment.
What Classical theories?
The fundamental principle of the classical theory is that the economy is self-regulating. Classical economists maintain that the economy is always capable of achieving the natural level of real GDP or output, which is the level of real GDP that is obtained when the economy's resources are fully employed. While circumstances arise from time to time that cause the economy to fall below or to exceed the natural level of real GDP, self-adjustment mechanisms exist within the market system that work to bring the economy back to the natural level of real GDP. The classical doctrine-that the economy is always at or near the natural level of real GDP-is based on two firmly held beliefs: Say's Law and the belief that prices, wages, and interest rates are flexible.
In a real economy which two factors can change the level of nominal GDP?
Inflation and Deflation
