Real GDP per Capita Concept

Real GDP per Capita

• Refers to nominal GDP per person, taking into account the changes in the price level.
• Differs from nominal GDP, which is measured as the sum of all expenditures in a particular year.
• Not the same as total expenditure on all real goods per capita, as it adjusts for price level changes.
• Differs from nominal GDP per person, as it accounts for changes in the price level.

Methods for Calculating GDP

• Total spending on domestic final products is a method for calculating GDP.
• Total domestic production is another method for calculating GDP.

Methods Not Used for Calculating GDP

• Total domestic income is not a method for calculating GDP.
• Total domestic tax revenue is not a method for calculating GDP.

GDP Concepts

• Real GDP per capita is not nominal GDP measured as the sum of all expenditures in a particular year.
• Real GDP per capita is not nominal GDP per person.
• Real GDP per capita takes into account changes in the price level.

Calculating GDP

• Methods for calculating GDP include:
  • Total domestic income.
  • Total spending on domestic final products.
  • Total domestic production.
• Total domestic tax revenue is not a method for calculating GDP.

Economic Cycles

• A period of rapid economic growth is called an expansion.
• A trough refers to a different stage in the economic cycle, not a period of rapid growth.
• A recession refers to a period of economic decline, not rapid growth.
• A bust refers to a different stage in the economic cycle, not a period of rapid growth.