Between 2009 and 2011 Ireland’s Real Gdp Is Expected to Fall by More Than 10%. Explain What Is Meant by This, and Examine the Extent to Which Measure of National Income Are an Accurate Reflection of Living Standards in

Good Essays
Course: Pre-U Economics

Between 2009 and 2011 Ireland’s real GDP is expected to fall by more than 10%. Explain what is meant by this, and examine the extent to which measure of national income are an accurate reflection of living standards in more economically developed countries (MEDCs).

Being an MEDC, Ireland is one of the few economically developed countries being tipped to fall in real GDP from 2009 to 2011. To reiterate, Ireland have not been making positive progress in terms of their economic growth, so their real GDP is indicating the hit and is expected to fall by just over 10%. But what does this mean for Ireland? By definition, Real GDP is the calculation of the Actual output/production of an economy adjusted with Inflation, it is in real terms so that we can be more defined and work out Ireland’s GDP while taking into account the general price level of goods in that country (inflation). Gross Domestic Product (GDP) is one of many economic indicators that help us understand how well an economy is doing annually. We can also use it in comparison to other economies and evaluate why an economy might be depreciating in output or appreciating in output. Other defined measures of output are; GDP per capita, which is a country’s GDP divided by the population of an economy. Another defined measure is Nominal GDP, which is the same standard calculation of an economies output but without taking into account inflation. As Irelands GDP is expected to fall by 10% in 2 years, Ireland will have to make necessary adjustments to their economy to prevent this assumption from happening. But this might not be the case. To perform these necessary actions, Ireland need to trust that the assumption is likely to happen and the measure of Real GDP is accurate enough to interpret their GDP over time.
The problems with interpreting GDP figures over time and in the future, is that, the economy is constantly changing. One example is Ireland’s population might rapidly increase

You May Also Find These Documents Helpful

  • Good Essays

    Why is GDP per capita useful as a measure of living standards? What are the limitations of GDP per capita as a comparable measure of living standards? Gross Domestic Product (GDP) measures the monetary value of final goods and services produced in a given year by factors of production within a country. GDP reports are released on the last day of each quarter, reflecting the previous quarter. Therefore, it is measured on a quarterly basis and measures the level of economic growth in different countries…

    • 1347 Words
    • 6 Pages
    Good Essays
  • Powerful Essays

    Comparison of GDP among country and living standard GDP per person is measured frequently that most countries provide information on GDP allowing comparing with other countries. It is measured on a consistent basis that the technical definition of GDP is relatively consistent among countries. When compared to other countries with GDP per capita, GDP per capita as well as abroad is almost always higher, therefore, rich countries and the poor have very different rate of GDP per person. If large GDP leads…

    • 1489 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    Standards of living can be evaluated by the measure of GDP, level of inflation, net exports and fiscal balance. Evaluation by using the GDP as an indicator would be relevant as it reflects the total national economic activity and the level of wealth of the society. GDP per capita is adjusted for the size of the economy in terms differences in price levels and also population of the country. There are many factors that would affect the standard of living in a country. Some that cannot be measured…

    • 752 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Although national income is a convenient way for measuring the standard of living between countries, it still has its limitations. Firstly, as national income statistics are calculated from millions of different returns to the government, inevitably mistakes are made. For example, returns may be inaccurate or simply not completed. This makes the data incorrect, hence hindering people to analyze the living standard of a country accurately. Secondly, National income does not record the output…

    • 639 Words
    • 3 Pages
    Good Essays
  • Good Essays

    GDP Imperfections – What Are They? o GDP per head ignores environmental degradation and other exhaustible resource consumption. Since it’s called as a ‘sustainable consumption’ measure, it’s incorrect because in any case, sustainable consumption per head is not the same as wellbeing. It is NOT wellbeing. o High GDP means high level of government expenditure or consumption which also initiate low level of saving. Low level of saving and/or high population growth condemn a country to a low…

    • 424 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    defined as either real GDP or real GDP per capita Real GDP per capita is found by dividing real GDP by population Which of the following best measures improvements in the standard of living of a nation? Growth of real GDP per capita If a nation real GDP increases from 100bill to 106bill and its population jumpts from 200mill to 212mill, real GDP per capita will remain constant For comparing changes in potential military strength and political preminence, the most meaningful measure of economic growth…

    • 980 Words
    • 4 Pages
    Satisfactory Essays
  • Good Essays

    GDP is the best measure of a country’s “standard of living” Discuss Gross Domestic Product (GDP) is the value of everything produced in the economy for the year. It usually is used to provide economic growth rates and other important data, it is valued in terms of the cost of all inputs. Gross means total; domestic means it applies to everything produced within the economy, product means output. Standard of living refers to the wellbeing of the population, this requires a very wide range of data…

    • 968 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    Measuring National Income - GDP Name For the following items, follow the directions, write the correct answer in the blank, or circle the correct answer. Having applied for a job at the Commerce Department’s Bureau of Economic Analysis, you are given the following hypothetical data to study before your interview. Figures are total value in billions of dollars. Household spending on: Services = $3,008 Nondurable goods = $1,776 Durable goods = $706 Business spending on plant and…

    • 338 Words
    • 3 Pages
    Satisfactory Essays
  • Better Essays

    LIMITATIONS OF ‘GDP PER CAPITA’ AS A BASIS FOR COMPARING LIVING STANDARDS BETWEEN COUNTRIES AND OVER TIME’’ • INTRODUCTION From the late ‘40s a lot of countries started to develop very quickly, despite the wars. Every country realised its strong points of growing economically, and this was their resources. Some countries have more land, some countries have more water, some have more oil and some have more gold. Knowing this every country started organizing its economy in order to become more powerful…

    • 1030 Words
    • 5 Pages
    Better Essays
  • Powerful Essays

    Gdp .. Measure of Welfare ?

    • 2485 Words
    • 10 Pages

    ENPC-EHTP-MBAXIV A MA 1407 : Business Economics in a Global Market Individual Assignment GDP vs. Welfare The Moroccan Example Othmane Bouzoubaa Student ID : MA14 - 016 April – May 2012 This paper emphasis on GDP as an inefficient measure of welfare using arguments from the Moroccan example. MBAXIV A – MA 1407 – Business Economics in a Global Market GDP & Welfare – The Moroccan Example Table of Contents 1. 2. 2.1 2.2 2.3 3. 3.1 3.2 4. 5. Introduction .............................…

    • 2485 Words
    • 10 Pages
    Powerful Essays