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Other Measures of Total Production and Total Income quiz #1 Flashcards

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Other Measures of Total Production and Total Income quiz #1
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  • What does GDP per capita measure in macroeconomics?
    GDP per capita measures the average value of all final goods and services produced domestically per person in a country.
  • How does GDP differ from GNP in terms of what they measure?
    GDP measures the value of all final goods and services produced within a country's borders, while GNP measures the output produced by a nation's citizens, both domestically and abroad, excluding foreign-produced goods within domestic borders.
  • What is the definition of per capita GDP for a country?
    Per capita GDP is the total GDP of a country divided by its population, representing the average economic output per person.
  • What is the main difference between GNP and GDP?
    The main difference is that GDP focuses on production within a country's borders, while GNP focuses on production by a country's citizens regardless of location.
  • In what way is GNP different from GDP?
    GNP includes the value of goods and services produced by a nation's citizens both domestically and abroad, whereas GDP only includes production within the country's borders.
  • How is GNP different from GDP?
    GNP measures the output produced by a nation's citizens anywhere in the world, while GDP measures the output produced within the country's borders, regardless of who produces it.
  • When is GDP roughly the same as GNP for a country?
    GDP is roughly the same as GNP when the income earned by a country's citizens abroad is about equal to the income earned by foreigners within the country.
  • What is Net Domestic Product (NDP) and how is it calculated?
    Net Domestic Product (NDP) is calculated by subtracting depreciation from GDP, representing the value of total production after accounting for the depreciation of assets.
  • Why might GDP be considered a better measure than GNP for countries with significant foreign investment?
    GDP includes all production within a country's borders, capturing the impact of foreign-owned investments that GNP would exclude. This provides a more complete picture of total economic activity in countries with substantial foreign investment.
  • What types of income are included in personal income but excluded from corporate income?
    Personal income includes transfer payments like welfare and interest on financial investments, which are received by households. It excludes income earned by corporations.