 A piece of economic data (statistic)  indicates the direction of an economy.

 used by investors to understand present or future investment possibilities  Used by economists to judge the overall health of an economy.

 Inflation rate (CPI)  Production activity (GDP)  Unemployment figures  Standards of living (HDI)

 GDP  GNP  NNP  HDI  CPI (inflation)  Unemployment  Trade position

 the total value of goods and services produced in a country during one year.

So what does this mean ???

 C =Household Consumption G =Government Spending I = gross private investment (X - M) = the net exports  GDP is a number that shows the worth (value)of the output of a country in local currency GDP = C + G + I + (X - M)

 It measures the value of economic activity within a country in one year..  It helps investors and economists understand business cycles soso

NOMINAL GDP REAL GDPGDP PER CAPITA What is the difference?

NOMINAL GDPREAL GDPGDP PER CAPITA Nominal GDP is the market value ( money- value) of all final goods and services produced in a geographical region, usually a country Real GDP is a measure of the value of output economy, adjusted for price changes (it takes into account inflation) GDP per capita = GDP per person ….. __GDP___ population = the amount of GDP that each individual gets

It gauges the health of the economy It indicates economic growth WHEN GDP is HIGH >>> HIGHER PRODUCTION LEVELS >>> LOW UNEMPLOYMENT >>> HIGHER WAGES (Demand for labour is high) >>> GREATER SPENDING

 An economic statistic that includes GDP, plus any income earned by residents from overseas investments, minus income earned within the domestic economy...  GNP = C + G + I + NX +NFP

 GNP means the total of all business production and service sector industry in a country plus its gain on overseas investment. investment

GDP GNP  Measuring all income earned within a country, or by measuring all expenditures within the country Read more: 3E6xk9h18http:// 3E6xk9h18  GDP, plus income from foreign sources, less income paid to foreign citizens and entities Read more: 3E6xuyviqhttp:// 3E6xuyviq

 It measures both the size and direction of economic activity (growth, stagnation or contraction)  Shows the relative strength of the nations economy compared to that of other nations

 What it is: Net National Product (NNP) is the market value of a nation's goods and services minus depreciation (often referred to as capital consumption).

 NNP = Gross National Product – Depreciation  Depreciation measures the amount of GNP that must be spent on new capital goods toGNPcapital maintain the existing physical stock. DEPRECIATION … Consumption of fixed capital

This amount is subtracted from GDP. WHY? it is needed to maintain the productive capacity of the economy Productive capacity is maximum output

 NNP is a measure of how much a country can consume in a given period.  the total value of a nation's annual output of goods and services minus the value of capital goods used up in the production of this output

 to measure and rank countries' levels of social and economic development  based on four criteria - life expectancy, - education, and - income - standard of living

THE HDI MAKES IT POSSIBLE TO: track changes in development levels over time and compare development levels in different countries. Why is it important ?

 1. It's difficult to balance spending on things that increase HDI while being an international GDP leader. 2. The pursuit of wealth affects HDI negatively. 3. It's very difficult for any people or government to achieve gains in all areas of life.

 A measure of changes in the purchasing-power of a currency and the rate of inflation. CPI measures: 1)price changes 2)cost of living changes.

 Government  Business  Labour  Private citizens

 Used to measure inflation  Guides the president when making economic decisions  Shows the effectiveness of government policy  Shows trends to help formulate future fiscal and monetary policy

 CPI is used to calculate the actual inflation rate,,, HOW?  CPI is one of the most frequently used statistics for identifying periods of inflation or deflation.

CPI = Current year Price x100 Base year price INFLATION = CPI current year – CPI previous year X 100 CPI previous year

 It tells us how much cost of living has risen due to price changes  What does this show?

The consumer price index or CPI is a more direct measure than per capita GDP of the standard of living in a country

 reflects prices of all goods and services produced within the country, whereas CPI reflects the prices of a representative basket of goods and services purchased by the consumer  The CPI measures changes in prices over time while the GDP measures changes in production.

 is a measure of the percentage of unemployed workers in the workforce.

  Choose 5 economic indicators from the word pic and explain what they mean.