Econmics presentation
- 1. Economics James Boggan and Cillian Flynn
- 2. GDP • Click to edit the outline text format Gross Domestic Product (GDP). • Used to measure the health of a countries economy. • The total market value of all final goods and services produced in a country equal to the total consumer investment and government spending plus the value of exports minus the value of inputs • Irelands GDP (2012) 210.4 Billion − Second Outline Level Third Outline Level − Fourth Outline Level Fifth Outline Level Sixth Outline Level Seventh Outline Level Eighth (www.cliffsnotes.com (www.investorwords.com)
- 3. Real GDP • Real GDP otherwise known as the current GDP is the measurement of economic output of a country minus the effect of inflation. • This give a more accurate account of the economies production per quarter. • Real GDP is what nominal GDP would have been if there was no price changes from base year. • Real GDP takes into account inflation. (www.useconomy.about.com)
- 4. GNP • GNP (Gross National product) • GNP is the total value of goods and services produced in a country in a particular year, plus income earned by its citizens including income of those living abroad, minus income of non residents in that country. • Consumption + Government Expenditures + Investments + Exports + Foreign Production by National Companies – Domestic Production by Foreign Companies = Gross National Product (www.investorwords/2186/GNP.html)
- 5. GDP per capita It’s an estimation of the value of goods produced per person in the country equal to the countries GDP divided by the total population of the country. For Example…. Irelands GDP per capita in 2012 is $42,600 This helps you compare countries at a smaller scale judging it by people rather than the country as a whole
- 6. Net Factor Income • Used to differentiate national income from domestic income • The difference between GDP and GNP • Net factor income in Ireland is negative due to large profit repatriations by multinationals (readyratios.com)
- 7. Limitations of using GDP as a way of judging an economies wealth
- 8. Foreign Direct Investment • FDI (foreign direct investment) • There are 1,033 foreign companies in Ireland • Google, Dell and Microsoft are some examples • The money earned by these companies will most likely leave Ireland • Artificially high GDP (www.idaireland.com)
- 9. Errors and Omissions • Errors in calculations • Black market • Trade by barter • Self sufficient (ingrimayne.com) (news.bbc.co.uk)
- 10. Disasters • Disasters (war) (natural disasters) • Disaster related mortality is a growing economic concern in the Asian countries. These deaths are hypothesized to have a significant impact on per capita gross domestic Product (GDP) of the countries. • Gross investment and life expectancy on economic growth of Pakistan, while there is a negative impact of arable land, net exports and labor force on GdP per capita. • Example: Earthquake in Pakistan in October 2005.
- 11. Ignores Income Distribution • HDI (Human Development Index) • A small amount of people in a country own all of the wealth (eg. Qatar)
- 12. Different countries have different needs •Where countries spend their money •Israel spend a lot of money on weapons and security •Germany spend money on infrasture, health systems, etc.
- 13. Longer working weeks and less holidays • Impact of longer working weeks and less holidays • GDP can rise due to people working longer hours and less time off as this is good for the economy but not necessarily good for the workers as they wouldn't be as happy • Standard of living and quality of life (www.businessnewsdaily.com)
- 14. The Black Economy And Non-Monetised Sectors GDP figures might understate the true living standards because of the existence and growth of the black economy. The black economy includes economic activity that goes unrecorded by the Inland Revenue and Customs & Excise. The nonmonetised sectors of the economy include output that is not sold at market prices but involves barter trade, and self-consumed products. • The Economist's latest estimates for the total value of the black economy throughout the world is $9 trillion. The scale of the underground economy is estimated to average 15% of national output for rich economies and 33% of national output for emerging economies. • Fuel tobacco digital entertainment and drugs.
- 15. 2012 Ireland UK USA Canada GDP Eastern European China Poland 2.441 Trillion 15.68 Trillion 1.819 Trillion 268.7 Billion 8.227 Trillion 487.7 Billion GDP per capita 42,600 37,500 50,700 43,400 2,800 9,300 20,900 GDP growth rate -1.20 1.30 1.60 1.40 6.18 7.50 0.80 Unemployment (%) 13.3 7.7 7.3 6.9 23.9 4.1 13 Inflation (%) 0.2 2.7 1.5 1.1 8.2 3.1 1 26 3 11 153 101 39 UN Ranking 210.4 Billion Asian country Nigeria $ African country HDI 7