NSS Exploring Economics 5
Measurement of economic performance (I) – GDP and GNP
Think it over
Hong Kong people are hardworking and productive. How do we measure our total output?
Our logistics industry is important to our economy. How do we measure its contribution to our economy?
Are the following items stocks or flows?
a. The number of Cokes in a refrigerator
b. Your savings deposit in a bank.
c. Output of toys per day
d. Birth rate of a country
Are the following resident producing units of Hong Kong?
a. A foreign domestic helper
b. An employee of the Bank of East Asia
c. Branches of the Bank of East Asia in Hong Kong
d. The Bank of East Asia (China) Limited (a subsidiary of the Bank of East Asia in the mainland of China)
In two minutes, try to recite the definition of GDP:
GDP is the ____________ of _________ of all __________ of a country or territory in a specified period.
Determine whether the following items are final products or intermediate products. a. Cloth bought by a housewife for making clothing for her children b. Cloth bought by a domestic garment factory for producing clothing for sale c. Cloth exported to a foreign garment factory for producing clothing for sale d. A sewing machine bought by a domestic garment factory for producing clothing for sale
How should the following government expenditures be treated in calculating GDP? a. Expenditure of government departments which are engaged in market activities b. Government investment expenditure
Are the following items included in the GDP calculated by the expenditure approach? Put a tick ‘’ to indicate to which expenditure component(s) they belong.
Is it included in the calculation of GDP?
a. Commission paid by a household for the purchase of a second-hand private car yes/no
b. A household’s expenditure on shares
c. Market value of a T-shirt produced last year but which remained unsold this year yes/no
d. A household’s expenditure on a currently produced sewing machine yes/no
e. Compensation paid to a traffic accident victim
f. Foreign expenditure on domestic exports of toys
g. A household’s expenditure on an imported computer
Refer to Table 1.1. Rank the ratios of various expenditure components (C, I, G and NX) to GDP in 2008 in descending order. What can you find?
Should the following items be deducted from the revenue of a coffee shop to obtain its value-added?
a. Shop rent paid to a
b. Wage payments
c. Electricity and water
d. Cost of coffee beans
e. Profit of entrepreneurs
f. Depreciation of fixed
g. Expenditure on the
purchase of fixed capital
Suppose an actor from Taiwan was employed by Hong Kong Disneyland to stage a show for six months. Are Hong Kong Disneyland and the actor Hong Kong residents?
Are the following items included in GDP or/and GNP? Are they external factor income flows?
Is it external factor income flow?
If so, is it an inflow or outflow?
a. Dividends from US shares held
by Hong Kong residents
b. Salary of a Filipino maid working in Hong Kong for three years
c. Payment to a US consultant hired by the MTR Corporation Limited on a three-month contract
d. Expenditure on goods exported
by a resident producing unit
Refer to the table below. From 2004 to 2008, which one was larger, GDP or GNP? Must GNP be larger than GDP? Explain.
# Revised figures
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