Introduction to Macroeconomic Principles and Understanding of GDP

Introduction to
Macroeconomic
Principles

Contents
INTRODUCTION ..........................................................................................................................1
Question 4....................................................................................................................................1
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
This respective essay will going to answer the understanding of GDP as it is vital for
improving the living standards and everyone will be better off. Gross domestic product measures
the monetary value of the finished goods and services that are bought by the final users in a
country.
Question 4
GDP of the country defines how the people are living in an nation and how well they are
employed to their life. It measures the total output of an economy by adding the total
consumption, investment, net export and government expenditure. Thus, the GDP considered as
the a quality approximation of income for the entire economy in an given period of time. The
standard of living is being derived from per capita GDP and is being determined by dividing the
GDP by the number of people who are living in the country. Generally, increasing global income
translates to the higher living standards (Crowley and Hallett, 2021). GDP basically divided by
population in order to determine the personal income, adjusted for the inflation with the real
GDP. According to the National Statistics said gross domestic product(GDP) is being expanded
by 0.9% in the month of October and November in 2020 in UK. That was the higher than the
economist's expectations and meant the economy was 0.7% larger than in February 2020. but it
is also noted that the there is the concern growth slowed again after the spread of omicron and
the launch of Plan B measures.
The formula for calculating GDP with the help of expenditure approach is given below:
GDP = private consumption + gross private investment + government investment +
government spending+(exports-imports).
Thus, I agree with the given statement GDP growth is necessary which also living
standards will improve and everyone is having the better life. It measures the overall working of
the economy. In UK, people are having better living standard with the rise in the overall GDP of
the economy with the resume in the services such as the transportation, retailing by which they
can ensures welfare and the better living standards to the business in the market (Hantzsche,
Kara and Young, 2019).
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