MILESTONE:

World Economic Measures

1. How is GDP different from GNP and GDP per capita?
-GDP is the sum of the market values, or prices, of all final goods and
services produced in an economy during a period of time.
- GNP is the value of all finished goods and services produced in a
country in one year by its nationals.
-​The main difference is that GNP (Gross National Product) takes into
account net income receipts from abroad. GDP (Gross Domestic Product) is a
measure of (national income = national output = national expenditure) produced
in a particular country. GNP = GDP + net property income from abroad
-GDP per capita is a measure of a country's economic output that
accounts for its number of people. It divides the country's gross domestic product
by its total population. That makes it a good measurement of a country's
standard of living.
2. How are frictional unemployment, structural unemployment, and cyclical
unemployment different from one another?
-​It is time spent between jobs when a worker is searching for a job or transitioning
from one job to another.
-Structural unemployment is a form of involuntary unemployment caused by a
mismatch between the skills that workers in the economy can offer, and the skills demanded
of workers by employers. Structural unemployment is often brought about by technological
changes that make the job skills of many workers obsolete.
-​Cyclical unemployment is ​unemployment that results when the overall
demand for goods and services in an economy cannot support full employment.
It occurs during periods of slow economic growth or during periods of economic
contraction.
3. How does supply of a product affect the price of goods?
-​If ​supply increases and demand remains unchanged, then it leads to
lower equilibrium ​price and higher quantity. If ​supply decreases and demand
remains unchanged, then it leads to higher equilibrium ​price​ and lower quantity.

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 4. How does the demand of a product affect the price of goods?
-​If ​demand increases and ​supply remains unchanged, then it leads to
higher equilibrium ​price and higher quantity. If ​demand decreases and ​supply
remains unchanged, then it leads to lower equilibrium ​price​ and lower quantity.
5. How would you explain the Consumer Price Index?
-​A Consumer Price Index measures changes in the price level of a weighted average
market basket of consumer goods and services purchased by households
6. What is a Consumer Basket in terms of the Inflation Rate?
7. How is the Demand Pull Inflation different from the Cost Push Inflation?
8. How do the GDP, Inflation Rate, and Unemployment Rate affect each
other?
9. Why are GDP, Inflation Rate, and Unemployment Rate used to measure a
country’s economic performance.
10.How do these measures relate to the Human Development Index (HDI)?

This document/presentation contains proprietary and confidential information. Reproduction, redistribution, or forwarding to any third party, in
whole or in part, is strictly prohibited unless made with prior written consent from AC Education Inc./iPeople, Inc. Violation or noncompliance
shall be dealt with according to law.