Elements of Economics
This article of discussion talks about an unusually large gap in productivity growth between large and small firms in Mexico. It addresses how Labour Productivity growth affects the economy and how the economy is burdened by small firms, despite large firms rapidly improving through investments in both technology and skills. In this assignment, I will be discussing how productivity would affect the Gross Domestic Product (GDP), GDP Growth, GDP per capita and the Sources of Economic Growth that could affect Mexico’s future economy.
GDP refers to the monetary value of all finished goods and services produced within a nation’s borders in a specific time period, usually calculated annually. It includes all private and public consumptions, government outlays, investments and exports less imports that occur within the nation. Immediate goods, or goods that were manufactured as part of the finished goods are excluded from the GDP count to avoid double counting. GDP are expressed in two terms, Nominal GDP and Real GDP. Nominal GDP reflects the value of all goods and services which are produced during a given time period, using the price at the time of production. Real GDP is similar to Nominal GDP, except that it uses a given base year price indices to remove effects of inflation. GDP Growth Rate refers to the rate of change that a nation’s GDP experiences from one year to another. GDP per capita is known as the income per person, calculated by dividing the GDP over the total population of a nation. It is generally used to compare wealth between nations, as it shows the relative performance of the nations. Lastly, there are two Sources of Economic Growth: Aggregate Hours and Labour Productivity. Aggregate Hours refer to the sum of all hours worked by all employed workers in a company. Labour Productivity is known as the quantity of output per time spent.
In the article of discussion, it is evident that Mexico’s economy has performed poorly over a span of 10 years
GDP refers to the monetary value of all finished goods and services produced within a nation’s borders in a specific time period, usually calculated annually. It includes all private and public consumptions, government outlays, investments and exports less imports that occur within the nation. Immediate goods, or goods that were manufactured as part of the finished goods are excluded from the GDP count to avoid double counting. GDP are expressed in two terms, Nominal GDP and Real GDP. Nominal GDP reflects the value of all goods and services which are produced during a given time period, using the price at the time of production. Real GDP is similar to Nominal GDP, except that it uses a given base year price indices to remove effects of inflation. GDP Growth Rate refers to the rate of change that a nation’s GDP experiences from one year to another. GDP per capita is known as the income per person, calculated by dividing the GDP over the total population of a nation. It is generally used to compare wealth between nations, as it shows the relative performance of the nations. Lastly, there are two Sources of Economic Growth: Aggregate Hours and Labour Productivity. Aggregate Hours refer to the sum of all hours worked by all employed workers in a company. Labour Productivity is known as the quantity of output per time spent.
In the article of discussion, it is evident that Mexico’s economy has performed poorly over a span of 10 years
References: Retrieved April 18, 2014, from https://www.boundless.com/economics/definition/gdp-per-capita/ Retrieved April 18, 2014, from http://www.investopedia.com/terms/g/gdp.asp Retrieved April 18, 2014, from http://www.investopedia.com/terms/r/realeconomicrate.asp Retrieved April 18, 2014, from http://www.investopedia.com/terms/s/structural_change.asp Retrieved April 18, 2014, from http://www.businessdictionary.com/definition/aggregate-hours.html 6. Moffatt. M. (n.d.). Labour Productivity – Dictionary Definition of Labour Productivity. In About.com. Retrieved April 18, 2014, from Retrieved April 18, 2014, from http://www.ons.gov.uk/ons/rel/elmr/explaining-economic-statistics/understanding-gdp-and-how-it-is-measured/sty-understanding-gdp.html 8. Rodrik. D. (April 17, 2014). Growing divide within developing economies. THE STRAITS TIMES, p. A32 OPINION. Retrieved April 19, 2014, from http://www.tradingeconomics.com/mexico/gdp-growth-annual 10. Williamson. S. H. (July 31, 2013). “What Was the U.S. GDP Then?” Measuring Worth – Gross Domestic Product. In Measuring Worth – Relative Worth Calculators and Data Sets. Retrieved April 18, 2014, from http://www.measuringworth.com/usgdp/