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Unit 2 Gross c Logo or Name Here VIETNAM’S GDP Your Logo or Name Here READING Your Logo or Name Here What does GDP stand for? What does it measure? EXERCISE 1 Answer the following.nit 2 Gross c Logo or Name Here VIETNAM’S GDP Your Logo or Name Here READING Your Logo or Name Here What does GDP stand for? What does it measure? EXERCISE 1 Answer the following.
Insert or Drag and Drop Image Here Unit Gross Domestic Product VIETNAM’S GDP Your Logo or Name Here READING Your Logo or Name Here EXERCISE Answer the following questions about the reading passage above What does GDP stand for? What does it measure? Your Logo or Name Here How many methods of calculating GDP are there? What are they? There are three approaches: - The production approach sums the “value-added” at each stage of production, where value-added is defined as total sales minus the value of intermediate inputs into the production process - The expenditure approach is calculated by adding up total consumption, investment, government spending, and the difference between exports and imports(net exports) - The income approach sums the incomes generated by production Your Logo or Name Here Why is it desirable for a country to have a larger GDP? Because when GDP is growing, especially if inflation is not a problem, workers and businesses are generally better off than when it is not Your Logo or Name Here EXERCISE How does real GDP differ from nominal GDP? • Real GDP represents the increase in nominal GDP that is due to increase in production • Real GDP is the Nominal GDP adjusted for inflation inflation Nominal GDP • Real GDP = • In an inflationary environment, the nominal GDP is greater than the real GDP production Your Logo or Name Here • What is GDP growth rate? GDP Growth rate is the percent increase in the economy's output from quarter to quarter It tells you exactly how fast a country's economy is growing How is GDP Per Capita calculated? GDP Per Capita is calculated by dividing GDP by the number of people in the country GDP per capita = Your Logo or Name Here What is the difference between GDP and GNP? Your Logo or Name Here If a Japanese-owned company manufactures smart phones in Vietnam, the value of those smart phones should be included in Vietnam’s GNP? F (It should be Vietnam’s GDP or Japan’s GDP) OWNERSHIP LOCATION Your Logo or Name Here 10 EXERCISE A B C Output a Measurement or the change in prices due to inflation Final good/service b The value of money in terms of what it can buy at a specified time j Nominal c The amount of goods or services produced in a period h Price deflator d Provide a Render d e Mutual reliance Distort g f Per person Intermediate input i Purchasing power Per capita 10 Interdependence g Change something to make it untrue or inaccurate h Existing as something in name only b i Good or service which is required for production of other goods or services f e j Good or service that is bought by the end user Your Logo or Name Here 11 EXERCISE Why is GDP important? • GDP is important because it helps a government make decisions such as whether to stimulate the economy by pumping money into it, in case the economy is not growing and needs such stimulus And in case the economy is getting heated, a government could act to prevent it from getting overheated • Businesses can use GDP as a guide to decide how best to expand or contract their production and other business activities • And investors also watch GDP since it provides a framework for investment decision-making Your Logo or Name Here 12 EXERCISE What are the limitations of GDP? • There is no accounting for activities that are not part of the legalized economy Thus, drug dealing and such illegal activities that generate a lot of income don't factor into GDP calculations Your Logo or Name Here 13 What are the limitations of GDP? • Another criticism is that some activities that provide value are not factored into GDP if you hire a maid to keep your house clean, a cook to prepare your meals and a nanny to care for your children, you will pay these hired helpers and such payments factor into GDP if you your own cooking and cleaning and care for your children without hiring a nanny, these activities not contribute to GDP Although GDP provides an idea about an economy's performance, it doesn't necessarily reflect the welfare of its citizens since it doesn't account for softer aspects such as their levels of happiness Your Logo or Name Here 14 EXERCISE What GDP stands for What GDP measure Definitions of some economic terms Three methods of calculating GDP What GDP counts The importance of GDP The difference between GDP and GNP The causes of increase in GDP The difference between nominal GDP and real GDP 10.The United States as the largest economy in the world 11.What GDP per Capita indicates Your Logo or Name Here 15 Your Logo or Name Here 16 EXERCISE What GDP stands for What GDP measure Definitions of some economic terms Three methods of calculating GDP What GDP counts The importance of GDP The difference between GDP and GNP The causes of increase in GDP The difference between nominal GDP and real GDP 10.The United States as the largest economy in the world 11.What GDP per Capita indicates Your Logo or Name Here 17 EXERCISE 6 1.In How What Why What When addition are are does doeconomists tires the to a economists recession measuring three sold use to phrases take automobile the to measure calculate place? economy, used economic factories to the what define value is GDP growth? GDP? notnominal of counted used for? GDP? in GDP? When there are two consecutive quarters of • GDP By Because Actual declining comparing Total is market also in market Real this used real prices GDP case, value GDP to the over indicate, tires time.are on not average, final people’s goods The living value standard of the tires will be reflected Final goods and services • in the total price of the car • Produced within an economy Your Logo or Name Here 18 EXERCISE Each group, consisting of students, will represent a country Find the information and talk about your country’s • Name • Location • Total area • Population • Economic growth including nominal GDP and its rank in the world (according to the report of the world Bank or IMF), GDP Growth Rate, Real GDP, and Real GDP Per Capita Your Logo or Name Here 19 ... nominal GDP? • Real GDP represents the increase in nominal GDP that is due to increase in production • Real GDP is the Nominal GDP adjusted for inflation inflation Nominal GDP • Real GDP =... 14 EXERCISE What GDP stands for What GDP measure Definitions of some economic terms Three methods of calculating GDP What GDP counts The importance of GDP The difference between GDP and GNP The... EXERCISE What GDP stands for What GDP measure Definitions of some economic terms Three methods of calculating GDP What GDP counts The importance of GDP The difference between GDP and GNP