Introduction to macroeconomics Essay Example | Topics and Well Written Essays - 1500 words

Introduction to macroeconomics - analyse ExampleA single estimate is then derived and published as the official estimate of GDP. in that location are two ways to measure the GDP, Real and the Nominal. Every country uses estimates of GDP in received terms as the international standard to measure growth in an miserliness. It is essential to follow a common standard so as to bothow meaningful comparisons between different economies. United farming follows the international conventions and European Union guidelines.This paper examines the GDP as a metric for measuring the wellness of an economy. It begins by analysing the distinction between the real and the titulary GDP and then goes on to elucidate the voids in using GDP as a sole quantifier of national economy. It then suggests other alternatives and gives the congress merits of using other systems to access the state of national economy of any country.The GDP of every economy tends to rise over a period of time. ... The real GDP is the value of the GDP at incessant prices using a given base year value. It excludes any inflation and reflects the changes purely in mint terms thus giving the actual level of economic activity. It is estimated using chained volume measures. The nominal GDP gives the value of GDP at current prices, prices for which year the GDP is transmitn. Growth in nominal GDP reflects the effects of inflation, as well as real GDP growth .It reflects change in value terms. For example to calculate the value of 1999 nominal GDP, we will sum the value of all expenditures in 1999, using the prices that prevailed then. The real GDP would be calculated by taking the sum of the values of all the expenditures in 1999, but using the prices that prevailed in the base year (2003). When the economists need to quantify inflation they take the ratio of nominal to real GDP, and take its percentage. This then is called the GDP deflator.A Time Series data of nominal and real GDP.YearGDP at current mar ket prices(millions of pounds) GDP at everlasting (2003) market prices(millions of pounds)GDP Deflator(index 2003=100)Population(in millions)1990558,160814,95668.4957.2371991587,080803,89273.0357.4391992611,974805,69975.9657.5851993642,656824,08577.9857.7141994680,978859,56679.2257.8621995719,747884,74881.3558.0251996765,152909,10284.1758.1641997811,194936,71786.6058.3141998860,796968,04088.9258.4751999906,567997,29590.9058.6842000953,2271,035,29592.0758.8862001996,9871,059,64894.0959.11320021,048,7671,081,46996.9859.32220031,110,2961,110,296100.0059.55420041,176,5271,146,523102.6259.83420051,224,7151,167,792104.8760.209Source http//eh.net/hmit/ukgdp/Efficacy of GDP as a