Unit 2 Gross c Logo or Name Here VIETNAM’S GDP Your Logo or Name Here READING Your Logo or Name Here What does GDP stand for? What does it measure? EXERCISE 1 Answer the following.nit 2 Gross c Logo or Name Here VIETNAM’S GDP Your Logo or Name Here READING Your Logo or Name Here What does GDP stand for? What does it measure? EXERCISE 1 Answer the following.
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Unit 2 Gross Domestic Product
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VIETNAM’S GDP
Trang 3READING
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1. What does GDP stand for? What does it measure?
EXERCISE 1
Answer the following questions about the reading passage above.
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Trang 52 How many methods of calculating GDP are there? What are they?
There are three approaches:
- The production approach sums the “value-added” at each stage of production, where value-added is defined as total sales minus
the value of intermediate inputs into the production process.
- The expenditure approach is calculated by adding up total consumption, investment, government spending, and the difference
between exports and imports(net exports).
- The income approach sums the incomes generated by production.
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3. Why is it desirable for a country to have a larger GDP?
Because when GDP is growing, especially if inflation is not a problem, workers and businesses are generally better off than when it is not
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Trang 74. How does real GDP differ from nominal GDP?
EXERCISE 2
inflation
production
Nominal GDP
• Real GDP represents the increase in nominal GDP that is due to increase in production
• Real GDP is the Nominal GDP adjusted for inflation
• Real GDP =
• In an inflationary environment, the nominal GDP
is greater than the real GDP
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Your Logo or Name Here
5. What is GDP growth rate?
GDP Growth rate is the percent increase in the economy's output from quarter to quarter It tells you exactly how fast a
country's economy is growing
6. How is GDP Per Capita calculated?
GDP Per Capita is calculated by dividing GDP by the number of people in the country
GDP per capita =
•
8
Trang 97. What is the difference between GDP and GNP?
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8. If a Japanese-owned company manufactures smart phones in Vietnam, the value of those smart phones should be included in
Vietnam’s GNP?
F (It should be Vietnam’s GDP or Japan’s GDP)
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Trang 11A B
1 Output a Measurement or the change in prices due to inflation
2. Final good/service b. The value of money in terms of what it can buy at a specified time
3. Nominal c The amount of goods or services produced in a period
4. Price deflator d Provide
7. Intermediate input g. Change something to make it untrue or inaccurate
8. Purchasing power h. Existing as something in name only
EXERCISE 2
C
j
h
a
d
g
i
b
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1. Why is GDP important?
• GDP is important because it helps a government make decisions such as whether to stimulate the economy by pumping money into it, in case the economy is not growing and needs such stimulus And in case the economy is getting heated, a government could act to prevent it from getting overheated
• Businesses can use GDP as a guide to decide how best to expand or contract their production and other business activities
• And investors also watch GDP since it provides a framework for investment decision-making
EXERCISE 4
12
Trang 132. What are the limitations of GDP?
• There is no accounting for activities that are not part of the legalized economy Thus, drug dealing and such illegal activities
that generate a lot of income don't factor into GDP calculations
EXERCISE 4
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2. What are the limitations of GDP?
• Another criticism is that some activities that provide value are not factored into GDP
if you hire a maid to keep your house clean, a cook to prepare your meals and a nanny to care for your children, you will pay these hired helpers and such payments factor into GDP
if you do your own cooking and cleaning and care for your children without hiring a nanny, these activities do not contribute to GDP
Although GDP provides an idea about an economy's performance, it doesn't necessarily reflect the welfare of its citizens since it doesn't account for softer aspects such as their levels of happiness.
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Trang 15EXERCISE 5
1. What GDP stands for
2. What GDP measure
3. Definitions of some economic terms
4. Three methods of calculating GDP
5. What GDP counts
6. The importance of GDP
7. The difference between GDP and GNP
8. The causes of increase in GDP
9. The difference between nominal GDP and real GDP
10.The United States as the largest economy in the world
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Trang 17EXERCISE 5
1. What GDP stands for
2. What GDP measure
3. Definitions of some economic terms
4. Three methods of calculating GDP
5. What GDP counts
6. The importance of GDP
7. The difference between GDP and GNP
8. The causes of increase in GDP
9. The difference between nominal GDP and real GDP
10.The United States as the largest economy in the world
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EXERCISE 6
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1.What are the three phrases used to define GDP?
• Total market value
• Final goods and services
• Produced within an economy.
2. Why are tires sold to automobile factories
not counted in GDP?
Because in this case, the tires are not final goods The value of the tires will be reflected
in the total price of the car.
3. What do economists use to calculate the value
of nominal GDP?
Actual market prices
growth?
By comparing real GDP over time.
5. When does a recession take place?
When there are two consecutive quarters of declining Real GDP.
6. In addition to measuring the economy, what is
GDP used for?
GDP is also used to indicate, on average, people’s living standard.
Trang 19Each group, consisting of 4 students, will represent a country Find the information and talk about your country’s
• Name
• Location
• Total area
• Population
• Economic growth including nominal GDP and its rank in the world (according to the report of the world Bank or IMF), GDP Growth Rate, Real GDP , and Real GDP Per Capita
EXERCISE 7