“Economic growth is the raise in price of the goods and services created by an economy.” (GDP Growth Definition, n.d., para1). It is measured by the percent rate of increase and calculated in real terms, for example: inflation- adjusted terms to net in the result of inflation on the price of the goods and services produced.
The GDP per capita is frequently used as a pointer as the average of living for individuals in a specific area, and economic growth means the increase in the average standard of living. Though, there are a few struggles in using the GDP per capita to calculate the general well being. For example: 1- GDP does not provide any information relevant to the sharing of income in a country. 2- GDP doesn’t consider the negative externalities from pollution resultant to financial growth. 3- GDP doesn’t consider the positivity that may happened from services such as learning and health. 4- GDP keeps out the worth of all the actions that take place outside of the market place.
The flaws of GDP are essential when learning about public policy, but it lean to be a good pointer, for the economic growth in the long run. Economic growth is exponential, where the supporter is resolute by the PPP annual GDP increase rate. Therefore, the differentiation in “the annual growth from country A to country B will multiply up over the years. For example, a growth rate of 5% seems similar to 3%, but over two decades, the first economy would have grown by 165%, the second only by 80%” (GDP Growth Definition, n.d., para3).
This entry gives GDP growth on an annual basis adjusted for inflation and expressed as a percent.
Country |1999 |2000 |2001 |2002 |2003 |2004 |2005 |2006 |2007 |2008 |2009 |2010 | |United States |4.1 |5 |0.3 |2.45 |3.1 |4.4 |3.2 |3.2 |2 |1.1 |-2.6 |2.8 | |
How to Calculate Gross Domestic Products?
The GDP is calculated using three methods:
1.) The sum value of final good or services produced by...