Question.3107 - JOURNAL 1. Explain and “relate to the real world” a key concept you learned that week. 2. What difficulties are you experiencing with this class? What is going well? 3. What suggestions do you have for improving the class or the presentation of the material? based on these topics:National accounting measures, excluded transactions, nominal & real GDP, GDP price index, economic growth, modern growth, ingredients of growth, role of labor and capital, analysis of productivity DISCUSSION "In your educated opinion (educated by our text and/or real life experience/knowledge), what is the most important institutional structure that would promote economic growth in poor follower countries? Why?"
Answer Below:
JOURNAL 1. Explain and “relate to the real world” a key concept you learned that week. Answer: Gross Domestic Product (GDP) is the value of all the goods and services produced in a country. However, it can be nominal GDP or real GDP. The Nominal GDP measures the value of all the goods and services produced expressed in current prices while Real GDP measures the value of all the goods and services produced expressed in the prices of some base year. For example, let’s say in year 2011, the US economy produced $100 billion worth of goods and services based on prices of year 2011. Here our base is year 2011 therefore the nominal and real GDP are the same i.e. $100 billion. However, in the year 2012, the US economy produced $110B worth of goods and services based on prices of year 2012. And if 2011 prices are used, those same goods and services are instead valued at $105 billion. In short: Year 2011 Nominal GDP = $100 billion, Real GDP = $100 billion Year 2012 Nominal GDP = $110 billion, Real GDP = $105 billion Nominal GDP Growth Rate = 10%, while Real GDP Growth Rate = 5% Another thing to learn here is the role of Inflation. If inflation is positive, the Nominal GDP and Nominal GDP Growth Rate will be less than their nominal counterparts. The difference between Nominal GDP and Real GDP is used to measure inflation in a statistic called The GDP Deflator. 2. What difficulties are you experiencing with this class? What is going well? Answer: Not facing any such difficulty with the class. And the content and flow of the class is appreciative. 3. What suggestions do you have for improving the class or the presentation of the material? Answer: The presentation of the material good. However, could be backed by some real world examples which students could directly relate to. DISCUSSION "In your educated opinion (educated by our text and/or real life experience/knowledge), what is the most important institutional structure that would promote economic growth in poor follower countries? Why?" Answer: As per me, an institutional structure which promotes poorer countries to learn technology faster from leader countries should be promoted. As 21 st century is the century of technological advancements, a lot of development would be dependent on the same.More Articles From Economics
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