Gdp presentation kris

36
Economics GDP & GN Kris O’Neill & Aaron Byrne

Transcript of Gdp presentation kris

Page 1: Gdp presentation   kris

Economics -

GDP & GNP

K r i s O ’ N e i l l

&

A a r o n B y r n e

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(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

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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

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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

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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

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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

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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

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Limitations of GDP

(B)

i. Limitations of GDP

ii. Economic Effects of the Black Market

Aaron Byrne

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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World Wide Statistics

(C)

Global Statistics

Kris O’Neill

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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

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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

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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

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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

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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

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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

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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

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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

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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

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• 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