ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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They calculate the % change in real GDP from one period to the next
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They calculate the difference in GDP from the past two calendar years
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They calculate the sum of GDP from the past two calendar years
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They compare percentages to other countries and calculate the country’s ranking
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Detailed explanation-1: -Real GDP can be calculated by adjusting nominal GDP by inflation. Real GDP can also be measured as a dollar or a percentage by calculating changes in real GDP from one period to the next. Real economic growth is used by policymakers to determine growth over time by comparing GDP from different time periods.
Detailed explanation-2: -To calculate the real GDP growth rate, you will base your calculation on real GDP figures as shown below: Real GDP growth rate = (most recent years real GDP-the last years real GDP) / the previous years real GDP.
Detailed explanation-3: -Real GDP per capita is calculated by dividing GDP at constant prices by the population of a country or area.
Detailed explanation-4: -Divide the nominal GDP by the GDP deflator and multiply by 100. This will give you the real GDP.
Detailed explanation-5: -The GDP of a certain period, when set against another, can show a comparison that can be measured using the given formula: Economic Growth = (GDP 2-GDP 1) / GDP 1 The result is expressed in a percentage. If the result is positive, it means the economy is growing by the said percent.