Write an essay about 300-400 words about Gross Domestic Product : analysis of Vi

Question

Write an essay about 300-400 words about Gross Domestic Product: analysis of Viet Nam economy's GDP composition and growth over time, as well as an investigation of the country's basis for income generation and any and all constraints to growth

Data : Population: 89.7 million GDP (PPP): $359.8 billion 5.4% growth 5.7% 5-year compound annual growth $4,012 per capita Unemployment: 1.9% Inflation (CPI): 6.6% FDI Inflow: $8.9 billion.

Note: I want a honest answer, please do not copy or plagiarize directly from any sources . Thank you.

Explanation / Answer

GDP is a measure of on economy's production. A higher GDP means a higher production of goods and services in an economy during a given year. Therefore; a higher GDP also means that more goods and services were available to the people of the country during the year. But more goods and services may not necessarily indicate that people were better off during the year. In other words, a higher GDP may not necessarily mean a higher welfare of the people. Even if it is higher it is not necessary that it is higher in the same proportion. By welfare we mean 'well-being', or simply the feeling of being better off.

GDP when expressed in physical quantities is called 'real GDP'. When expressed in terms of the current market-value of these quantities, it is called 'nominal GDP'.

In practice, it is not possible to calculate real GDP directly. It is because a country produces not one but a large number of goods and services. To find the real GDP we need to add all the quantities produced of these goods and services. But it is not possible to add them because different goods and services are measured in different weights and measures, for example in kilograms, meters, liters, numbers, etc. Though these quantities cannot be added their market values can be added. Therefore, in practice nominal GDP is calculated first. It is also called 'GDP at current prices'.

After the nominal GDP is estimated, the same is converted into real GDP but only indirectly and usable only comparing real GDP overtime. The conversion aims at eliminating the effect of change in prices on the nominal GDP. The main steps in the conversion pr are:

Real GDP of year 2 = Nominal GDP of year 2 / Price index of year 2 x 100

This will give us real GDP of year 2. It is also called 'GDP at constant prices' because the effect of change in prices, in comparison to the base year, has been eliminated. Note that price index plays the role of deflator deflating current price estimates into constant price estimates. In this way price index may be called 'GDP deflator’.

We can thus find real GDP of a year only if we have information about nominal GDP and price index of that year.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.