Growing Economies - Growth rate of the UK economy compared to emerging economies - 4.1.1
Growth rate - is the rate at which a nation's gross domestic product (GDP) changes/grows from one year to another
Gross Domestic Product - The total value of output (goods and services) produced in the UK in a particular time period, used to measure change in economic activity.
Emerging economies - An economy with incomes that are growing but are still quite low. Such countries constitute approximately 80% of the global population and represent about 20% of the world's population.
BRIC economies - The economies of Brazil, Russia, India and China, which are at a similar stage of economic development.
Exchange rates - The price of one currency in terms of another
Purchasing Power Parity (PPP) - Allows for differences in the cost of living in different countries, which gives more realistic comparisons of GDP
According to the Office for National Statistics, the UK economy has grown by an average of 2.2% every year since 1956. However, emerging economies such as China and India are growing at much faster rates. So some UK businesses boost their growth by focusing on these rapidly emerging economies.
In order to compare the growth rate of the UK with other emerging economies, GDP is often used, which is normally expressed in a common currency such as the US dollar ($)
Comparing GDPs of different countries usually means converting other currencies to the US dollar, which can cause problems as a result of exchange rates. Exchange rates vary from month to month for products that are traded between nations (such as cars) but this does not affect products and services that are traded within a country (such as haircuts).
Calculations of GDP based on market exchange rates tend to overestimate the cost of living in poorer developing countries. To try to ensure GDP is measured realistically, a method called purchasing power parity (PPP) can be used.
PPP takes a standard shopping basket of goods and prices them for each country. A simple way to explain this is through The Economist's Big Mac index, which prices a McDonald's Big Mac using PPP to show the real cost of living.
Gross Domestic Product - The total value of output (goods and services) produced in the UK in a particular time period, used to measure change in economic activity.
Emerging economies - An economy with incomes that are growing but are still quite low. Such countries constitute approximately 80% of the global population and represent about 20% of the world's population.
BRIC economies - The economies of Brazil, Russia, India and China, which are at a similar stage of economic development.
Exchange rates - The price of one currency in terms of another
Purchasing Power Parity (PPP) - Allows for differences in the cost of living in different countries, which gives more realistic comparisons of GDP
According to the Office for National Statistics, the UK economy has grown by an average of 2.2% every year since 1956. However, emerging economies such as China and India are growing at much faster rates. So some UK businesses boost their growth by focusing on these rapidly emerging economies.
In order to compare the growth rate of the UK with other emerging economies, GDP is often used, which is normally expressed in a common currency such as the US dollar ($)
Comparing GDPs of different countries usually means converting other currencies to the US dollar, which can cause problems as a result of exchange rates. Exchange rates vary from month to month for products that are traded between nations (such as cars) but this does not affect products and services that are traded within a country (such as haircuts).
Calculations of GDP based on market exchange rates tend to overestimate the cost of living in poorer developing countries. To try to ensure GDP is measured realistically, a method called purchasing power parity (PPP) can be used.
PPP takes a standard shopping basket of goods and prices them for each country. A simple way to explain this is through The Economist's Big Mac index, which prices a McDonald's Big Mac using PPP to show the real cost of living.
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