Per capita originates from the Latin language – meaning ‘by head’, or ‘per person’. In economics it is used primarily with GDP to find measurements such as GDP per capita, real GDP per capita, GDP (PPP) per capita, and Gross National Income (GNI).
Price Elasticity of Demand (PED) measures how customers change their behaviour when prices change. In other words, it refers to the relationship between price and demand, and how demand reacts when prices change.
Aggregate demand refers to all the goods produced and brought within the economy. Economists calculate this using values at a specific point in time. In other words, the monetary value of the exchange is registered over the course of a month, quarter, or year.
Cross Price Elasticity of Demand (XED) measures the relationship between two goods when the price of one changes.
Nominal GDP is the total economic output of a nation using current prices. In other words, it is the measurement of all the goods and services a country produces, in prices, at the time they are made.
There are two main types of inflation in economics. They are cost-push and demand-pull inflation. Cost-push inflation looks at the supply side of goods. So anything that would affect the price for the good in order for it to reach the market. By contrast, demand-pull inflation looks at the demand side. So anything that affects the price after it has reached market.
GDP stands for Gross Domestic Product. On its own, it may not make much sense. However, when
we split it down, the naming becomes clearer. Let us first start with ‘Gross’. It has various
meanings, but in the case of GDP, it is used as a noun. This has a meaning of ‘Complete Amount’.
Real GDP is Gross Domestic Product (GDP) that accounts for inflation or deflation. In other words, it disregards the impact that higher prices have played in economic growh and allows us to compare the quantity of goods produced rather than the value.
Deflation can be caused from a number of factors. However, it should be noted that these factors alone may not necessarily cause deflation.
Gross National Product (GNP) refers to the total value of goods and services where the means of production is owned by domestic residents. It calculates the GDP of the country, plus any income that domestic residents receive on investments abroad, but minus any income foreign residents receive on domestic investments.
