NOTES ON ECONOMIC DEVELOPMENT GNP AND GDP

INFLATION  Gross National Product (GNP) – total value

of income earned by residents of a country.
 Inflation - occurs when an economy grows due
(Basta Pilipino gumawa, kahit saan)
to increase spending.
- Value of goods and services made by
 Stagflation – High inflation + Jobless (Social
Filipinos.
Unrest)
- All income of Filipino residents from any
 Bangko Sentral ng Pilipinas (BSP) – forecast and
locations: domestically and abroad
control inflation.
(Remittances are NOT part of GDP but GNP)
 If the inflation rate is as long as ONE DIGIT, it is
 Gross Domestic Product (GDP) – total value
still manageable.
of production realized by resident
 2.4% - Ideal rate of BSP for 2020 producers, could be foreigners who are a
 2.6% - Average rate of 2020 resident of the country (Only income
 3.5% - December 2020 sources from the Philippines). (Kahit sino
 3.3% - November 2020 basta nasa Pilipinas)
 2.5% - December 2019 - Value of goods and services made in the
 December – the month when inflation Philippines.
increases.
2 FACTORS - Economic Territory and Residency
CONTROL THE INFLATION:
HOW GDP AND GNP IS COMPUTED?
 Price Control – lessen the money circulation.
 Improve Productivity – to have enough supply;  Production Approach – calculates GDP
introduce new technology for mass production based on industrial origin where
 SOURCES OF INFLATION: domestic economy is. Divided into
 Demand Pull Inflation – price increases because three:
of demand. - Agriculture, fishery, and forestry
 Cost Pull Inflation – price increases because the - Industry
cost of ingredients increases. - Services
Sums up the value of the sectors
Decrease in Supply = Increase in Demand  Expenditure Approach – sums up
= Increase in Price personal consumption; expenditures of
households, government consumption,
investor, or capital formation and
exports less imports.
- Yields GDP by type of expenditure:
household expenditure surveys, retail
and wholesale trade surveys, producer
surveys, custom records government
accounts, and special surveys done by
statistics.

NET FACTOR INCOME

- Added to the GDP to determine GNP.