Economics (Year 11)
Gross Domestic Product
GDP is defined as the total value of goods and services sold over a period of time. It is seen as a the most prominent measure of economic performance. As of August 6, the Reserve Bank of Australia recorded Australia’s GDP measure to equal 1.1%.
Types of GDP
Real GDP: This is a GDP measurement that has been adjusted for inflation. This figure can be found by subtracting the inflation rate from the nominal GDP figure. Nominal GDP: This is the GDP figure that hasn’t be adjusted for inflation. It can also be known as ‘gross GDP.’
GDP per capita: This measure of GDP growth is calculated by dividing the Real GDP figure by the population size. This measure is a better indicator of how average prices change as it accounts for change in nation’s output and population size. In order for households’ standards of living to increase, GDP must rise faster than population growth.
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