by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Effect of Sustained Economic Growth?Nothing is more important for people’s standard of living than sustained economic growth. Even small changes in the rate of growth, when sustained and compounded over long periods of time, make an enormous difference in...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How to Measure Productivity An economy’s rate of productivity growth is closely linked to the growth rate of its GDP per capita, although the two are not identical. For example, if the percentage of the population who holds jobs in an economy increases, GDP per capita...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How Does the Rule of Law relate to Economic Growth?Economic growth depends on many factors. Key among those factors is adherence to the rule of law and protection of property rights and contractual rights by a country’s government so that markets can work effectively...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How well does GDP Measure the Standard of Living of a Society?While GDP includes spending on recreation and travel, it does not cover leisure time. Clearly, however, there is a substantial difference between an economy that is large because people work long hours, and...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How well does GDP Measure Society Well-Being?The level of GDP per capita clearly captures some of what we mean by the phrase “standard of living.” Most of the migration in the world, for example, involves people who are moving from countries with relatively low GDP...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How to Convert GDP to a Common Currency?Converting GDP of two countries using different currencies requires the use of exchange rates. Exchange rates are expressed either as the units of country A’s currency that need to be traded for a single unit of country B’s...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How to Convert Currencies with Exchange Rates?To compare the GDP of countries with different currencies, it is necessary to convert to a “common denominator” using an exchange rate, which is the value of one currency in terms of another currency. We express exchange...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
Why is Tracking Real GDP Important? Real GDP is important because it is highly correlated with other measures of economic activity, like employment and unemployment. When real GDP rises, so does employment.The most significant human problem associated with recessions...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How to Measure GDP?GDP can be measured based upon what is demanded for consumption or based upon what is produced. Since every market transaction must have both a buyer and a seller, GDP must be the same whether measured by what is demanded or by what is produced.GDP...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Nominal GDP Price Index?Nominal GDP Price Index is an index used to convert historical GDP numbers to a present value. It is a price index is a two-digit decimal number like 1.00 or 0.85 or 1.25 (though, for ease of use, it has traditionally been...
