gdp presentation kris
TRANSCRIPT
Economics -
GDP & GNP
K r i s O ’ N e i l l
&
A a r o n B y r n e
(A)
i. Gross Domestic Product – GDP
ii. Real GDP
iii. GNP
iv. Per Capita GDP
v. Net Factor Income
(B)
vi. Limitations of GDP
vii. Economic Effects of the Black Market
(C)
Global Statistics
Contents
GDP is “one of the primary indicators used to gauge
the health of a country’s economy” (Investopedia, 2009)
GDP indicates the size of an economy – It represents
all goods and services produced over a certain period
GDP is usually compared to figures from the previous
year in an individual economy
Gross Domestic ProductQ u e s t i o n 1 . ( A ) ( i )
Kris O’Neill
Real GDP is “an inflation-adjusted measure that reflects the
value of all goods and services produced in a given year
expressed in a base price” (Investopedia, 2013)
Real GDP takes into account changes in price level –
providing more accurate figures
E.g. Ireland in 2005 – the Nominal GDP = €100 bill – Due to
increased level of prices from 2001-2005 the Real GDP = €90
bill
Real GDP( A ) ( i i )
Kris O’Neill
GNP and GDP are closely related – the difference is
that “GNP is the total value of all goods and services
produced plus the income earned minus the income of
non-residents” (InvestorWords, 2013)
The GNP measures the value of goods and services
that all citizens produce regardless of their location
GNP is a one measure of the condition of an economy
Gross National Product( A ) ( i i i )
Kris O’Neill
Per Capita GDP is a measure of the GDP of a country
divided by the number of people in the country
Per Capita GDP is especially useful for comparing one
country to another with regards to performance
It gives a good idea of the spending power per person
in one country
Per Capita GDP( A ) ( i v )
Kris O’Neill
Net Factor Income represents the difference
between payments received from the foreign sector
by citizens and payments made to foreigners who
may be employed to make a good or provide a
service
Net Factor Income is the difference between GDP
and GNP in a country
Net Factor Income( A ) ( v )
Kris O’Neill
Limitations of GDP
(B)
i. Limitations of GDP
ii. Economic Effects of the Black Market
Aaron Byrne
An environmentally damaging practice that can diminish a natural resource thus negating the continued use or availability of that resource.E.G 1.1. China fishing industry- One of the largest fishing
industries in the world.2. 2005 – Aquaculture harvest was 32.4million tonnes.3. Exports valued at €5.62billion4. UN FAO – estimated 70% of the fish population is fully
used or in crisis.
1. Unsustainable practises
Aaron Byrne
E.G 2. Fossil fuel consumption
1. Limited supply2. Mass consumption of cheap fossil fuels3. Saudi Arabia – worlds largest oil producer approaching
end of production4. Replenishment rate of fossil fuels takes millions of
years
1. Unsustainable practises
Aaron Byrne
32,400,000-22,680,000 9,720,000 tonnes
China fishing industry€5,620,000,000€-3,930,000,000€1,690,000,000
-70%
Aaron Byrne
The sum of all goods and services which are produced
by a country in a given period of time. Bad composition of GDP – how diversified the
production within an economy is.E.G 1.1. Saudi Arabia 2009: Agriculture – 3.2%
Services – 36.4% Industry – 60.4%
2. Petroleum & petroleum products made up 90% of total exports.
2. Bad composition of GDP
Aaron Byrne
E.G 2.1. Mozambique 2007: Industry – 8%
Services – 15% Agriculture – 77%
2. Main exports include: Cotton, sugar, cashews and citrus.
2. Bad composition of GDP
Aaron Byrne
Transactions which producers provide to people for free or at economically insignificant prices.E.G 1.1. Second hand sales – old equipment, vehicles,
un-used stock. E.g. Bus van = €25,000 – annual depreciation 20%
Value after 3 years = €10,000Sold for €9,500
3. Non-production transactions
Aaron Byrne
E.G 2.1. Transfer payment – social welfare,
unemployment benefits, pension.2. 2012 – 1.469million people in receipt of a
weekly welfare payment.3. 2012 expenditure - €20.774billion4. Decrease of 0.9% over 20115. Not counted as it is money transferred rather
than paid for products or services.
Aaron Byrne
The unequal distribution of household or individual income across the various participants in an economy.1. E.g. 70% of the total income is controlled by
20% of the population.2. Overall wealth of a country is primarily
determined by the larger income of the minority of the population.
4.Income Inequality
Aaron Byrne
E.G 1.1. Gini coefficent - measures degree of
inequality in distribution of income in a country.
2. 0=perfect equality, 1=perfect inequality3. 2011 EU average = 30.74. 2011 – Ireland rank 20 – 31.15. Norway rank 1 – 22.9
Aaron Byrne
E.G 2.Saudi Arabia 1. Oil industry 2012 - €218.80billion2. Population – 28million3. ¼ of population on or below poverty line4. Estimated 2-4million natives live on less than
€386.85 a month - €12.40 a day5. King Abdullah's personal fortune at €13.13bn
4.Income Inequality
Aaron Byrne
5. Population
China
20121. Population – 1.351
billion2. GDP – €6.00trillion 3. Per capita – €4442.42
Switzerland
20121. Population –
7.997million2. GDP – €461.09billion 3. Per capita – €57656.11
Aaron Byrne
Underground economy – any economic activity that takes place outside of government control.Annual cost Ireland - €6.1billionE.G 1.1. Construction industry – cash only/cash in-
hand, no VAT2. Legitimate contractors- €250m to €500m
back into the industry
6. Black economy
E.G 2.1. Tobacco industry - €3 million per week from
illegal tobacco.2. 2011- 15% of smokers consuming illegal
cigarettes3. 2012- 95.6 million cigarettes seized valued at
€43.3 million
6. Black economy
Aaron Byrne
Unemployment1. Ireland 2013 – 13.3%2. 2012- 1.469million people in receipt3. 2012 social welfare - €20.774billion4. Budget 2014 – Job seekers allowance 14 Jan:
- No children, aged 18-24 = €100 per week-No children, aged 25 = €144 per week-Aged 26 increase = €188 per week
B. ii)Economic effects of black market in
Ireland
Aaron Byrne
5. High unemployment benefits – beneficial to
remain unemployed and continue to claim benefits, rather than work for a lower wage.
6. Nixers- people working off the books, cash in hand, continue to claim unemployment benefits.
B. ii)Economic effects of black market in
Ireland
Aaron Byrne
Lost tax revenueCigarette smuggling1. Annual government loss - €937million lost tax
revenue.2. Retailers - €537million, job losses.3. 32.8% discarded cigarette packs are non-
domestic.4. Ireland – largest smoker of smuggled
cigarettes in entire EU 2012
B. ii)Economic effects of black market in
Ireland
5. Ireland 2013 – most expensive price per pack
of 20 cigarettes in Europe.6. Retail price - €9.50 per pack7. Collected tax - €7.728. Illegal cigarettes purchased - €0.50c per pack9. Selling price - €4.5010.Difference - €5.00
B. ii)Economic effects of black market in
Ireland
Aaron Byrne
World Wide Statistics
(C)
Global Statistics
Kris O’Neill
IRELAND
U.K. USA CANADA
Republic of Congo
China Moldova
€ € € € € € €
TOTAL GDP
(2012)
152.27
Billion
1.76
Trillion
11.34
Trillion
1.32
Trillion
12.92
Billion
5.95
Trillion
5.25
Billion
GDP PER CAPITA(2012)
€
33,151.3
1 P/P
€
27,856.5
5
P/P
€
36,138.6
3 P/P
€
37,768.6
9 P/P
€
196.71
P/P
€
4,405.48
P/P
€
1,473.99
P/P
GDP GROWTH
RATE (MOST
RECENT)(2012)
0.9% 0.3% 2.2% 1.7% 3.8% 7.8% -0.8%
Q u e s t i o n 1 . ( C )
Kris O’Neill
Q u e s t i o n 1 . ( C )
UNEMPLOY -
MENT(2013)
%
13.3
%
7.70
%
7.30
%
6.90
%
50.30
%
4.10
%
4.70
%
INFLATION(2013)
%0.20
%
2.70
%
1.50
%
1.10
%
1.43
%
3.10
%
3.90
%
UN HDI RANKING
(2012)
#7
of
#186
#26
of
#186
#3
of
#18
6
#11
of
#186
#186
of
#186
#13
of
#186
#113
of
#186
IRELAN
DU.K. USA CANADA Republic
of CongoChina Moldova
Kris O’Neill
References(i) GDP
• Investopedia. (2009). What is GDP and why is it so important?.
Available: http://www.investopedia.com/ask/answers/199.asp.
Last accessed 25/10/2013.
(ii) Real GDP
• Investopedia. (2013). Real Gross Domestic Product (GDP).
Available: http://www.investopedia.com/terms/r/realgdp.asp.
Last accessed 25/10/2013.
(iii) GNP
• InvestorWords. (2013). What is GNP?.
Available: http://www.investorwords.com/2186/GNP.html.
Last accessed 25/10/2013.
• Central Statistics Office. (2013). What are GDP and GNP?. Available: http://www.cso.ie/en/studentscorner/nationalaccounts/whataregdpandgnp/. Last accessed 25/10/2013.
Quest ion 1 . ( A )
Kris O’Neill
References(iv) Per Capita GDP
• Investopedia. (2013). Per Capita GDP.
Available: http://www.investopedia.com/terms/p/per-capita-gdp.asp. Last accessed
31/10/2013.
(v) Net Factor Income
• Dictionary, Business. (2013). What is Net Foreign Factor Income?.
Available: http://www.businessdictionary.com/definition/net-foreign-factor-
income.html. Last accessed 31/10/2013.
Quest ion 1 . ( A )
Kris O’Neill
References
• Moultry, L . (2013). The Definition of Sustainable Business Practices.
Available: http://smallbusiness.chron.com/definition-sustainable-business-practices-
18748.html.
Last accessed 31st Oct 2013.
• National Geographic. (1995). Diminishing Returns.
Available: http://ngm.nationalgeographic.com/ngm/0704/feature1/legacy1.html.
Last accessed 31st Oct 2013.
• Quain, S. (2013). The composition of GDP.
Available: http://www.ehow.com/info_8562133_composition-gdp.html.
Last accessed 31st Oct 2013.
Quest ion 1 . ( B )
Aaron Byrne
References
• Welfare. (2012). Statistical Information on Social Welfare Services 2012 is
published.
Available: http://www.welfare.ie/en/pressoffice/Pages/pr110713.aspx.
Last accessed 31st Oct 2013.
• Sullivan, K. (2013). Saudi Arabia's riches conceal a growing problem of poverty.
Available: http://www.theguardian.com/world/2013/jan/01/saudi-arabia-riyadh-
poverty-inequality.
Last accessed 31st Oct 2013.
.
Quest ion 1 . ( B )
Aaron Byrne
References
• Irish Construction. (2013). Budget 2014 shadow economy reforms could be worth
€250-€500m to the building sector.
Available:
http://www.irishconstruction.com/budget_2014_shadow_economy_reforms_could_be_wo
rth_250_500m_to_the_building_sector.PAGE3394.html.
Last accessed 31st Oct 2013.
• The journal. (2012). Booming black economy killing small business.
Available: http://www.thejournal.ie/booming-black-economy-killing-small-business-
533041-Jul2012/.
Last accessed 31st Oct 2013
.
Quest ion 1 . ( B )
Aaron Byrne
References
• Citizen Information. (2013). Job seekers allowance.
Available:http://www.citizensinformation.ie/en/social_welfare/social_welfare_payments/
unemployed_people/jobseekers_allowance.html.
Last accessed 2013.
• Youtube - Economics: Off the Books: The Underground Economy -
http://www.youtube.com/watch?v=39SH1Y4L0k8
• Youtube- (Macro) Episode 20: GDP - http://www.youtube.com/watch?
v=yUiU_xRPwMc
• Youtube - LImitations of GDP - http://www.youtube.com/watch?v=_dye0kH4idE
.
Quest ion 1 . ( B )
Aaron Byrne
Ireland GDP
• The World Bank. (2012). GDP (current US$).
Available: http://data.worldbank.org/indicator/NY.GDP.MKTP.CD.
Last accessed 25/10/2013.
Per Capita GDP
• The World Bank. (2012). GDP per capita (current US$).
Available: http://data.worldbank.org/indicator/NY.GDP.PCAP.CD.
Last accessed 25/10/2013.
GDP growth rate
• The World Bank. (2012). GDP growth (annual %).
Available: http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG.
Last accessed 25/10/2013.
Unemployment
ReferencesQuest ion 1 . ( C )
Kris O’Neill
• Central Statistics Office. (2013). Live Register.
Available:http://www.cso.ie/en/media/csoie/releasespublications/documents/
latestheadlinefigures/lreg_sep2013.pdf.
Last accessed 25/10/2013.
Inflation
• Trading Economics. (2013). Unemployment Rate.
Available: http://www.tradingeconomics.com/country-list/unemployment-rate.
Last accessed 25/10/2013.
HDI Ranking
• Outreach. (2012). Human Development Index Trends. HDI Trends. 1 (2), 148-151.
ReferencesQuest ion 1 . ( C )
Kris O’Neill