23 Facts About Nominal GDP


Total Nominal GDP can be broken down into the contribution of each industry or sector of the economy.

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Nominal GDP definitions are maintained by a number of national and international economic organizations.

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Nominal GDP is often used as a metric for international comparisons as well as a broad measure of economic progress.

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However, critics of the growth imperative often argue that Nominal GDP measures were never intended to measure progress, and leave out key other externalities, such as resource extraction, environmental impact and unpaid domestic work.

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The modern concept of GDP was first developed by Simon Kuznets for a 1934 U S Congress report, where he warned against its use as a measure of welfare .

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The role that measurements of Nominal GDP played in World War II was crucial to the subsequent political acceptance of Nominal GDP values as indicators of national development and progress.

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Nominal GDP became truly global in 1993 when China officially adopted it as its indicator of economic performance.

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Nominal GDP can be determined in three ways, all of which should, theoretically, give the same result.

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Second way of estimating Nominal GDP is to use "the sum of primary incomes distributed by resident producer units".

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Third way to estimate Nominal GDP is to calculate the sum of the final uses of goods and services measured in purchasers' prices.

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Nominal GDP is the sum of consumption, investment, government Expenditures and net exports .

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Nominal GDP can be contrasted with gross national product or, as it is known, gross national income .

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The difference is that Nominal GDP defines its scope according to location, while GNI defines its scope according to ownership.

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Nominal GDP is product produced within a country's borders; GNI is product produced by enterprises owned by a country's citizens.

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International standard for measuring Nominal GDP is contained in the book System of National Accounts, which was prepared by representatives of the International Monetary Fund, European Union, Organisation for Economic Co-operation and Development, United Nations and World Bank.

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We would see that the country's Nominal GDP had realistically increased 50 percent over that period, not 200 percent, as it might appear from the raw Nominal GDP data.

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The Nominal GDP adjusted for changes in money value in this way is called the real, or constant, Nominal GDP.

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Constant-Nominal GDP figures allow us to calculate a Nominal GDP growth rate, which indicates how much a country's production has increased compared to the previous year.

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Per-capita Nominal GDP is a measure to account for population growth.

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For example, many environmentalists argue that Nominal GDP is a poor measure of social progress because it does not take into account harm to the environment.

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Instances of Nominal GDP measures have been considered numbers that are artificial constructs.

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Sarah Arnold, Senior Economist at the New Economics Foundation stated that "Nominal GDP includes activities that are detrimental to our economy and society in the long term, such as deforestation, strip mining, overfishing and so on".

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Some have pointed out that Nominal GDP did not adapt to sociotechnical changes to give a more accurate picture of the modern economy and does not encapsulate the value of new activities such as delivering price-free information and entertainment on social media.

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