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Showing posts from November, 2020

How Do You Find The Maximum Change in Real GDP?

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  A nation's gross domestic product (GDP) is an estimation of the overall amount, usually a quarter or a year of all the goods and services it generates over a given time. As a point of reference, the greatest use is Does the nation's economy expands or contracts relative to the prior duration measured?  Two key ways of calculating GDP are available: by measuring expenditure or by measuring revenue. And then there's actual GDP, which is an improvement that reduces inflation's consequences so that the rise or contraction of the economy can be easily seen. Calculate GDP Based on Spending One way to achieve GDP is to count all of the money invested by the various groups involved in the economy. Consumers, corporations, and the government are included. All accounts for goods and services that contribute to the overall GDP.  Moreover, some of the goods and services of the country are sold for sale overseas. And imports from overseas are some of the commodities and services ...

What is The External Sector of An Economy?

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  The external balance, unlike internal equilibrium, is directly dictated by the random interplay of action optimization by domestic and foreign agents. Disturbances arising abroad affect cross-border trade movements and thus, create domestic implications.  In the same way, shifts in the domestic economy are partially distributed globally. Therefore the state of external equilibrium suggests an incentive for strategic intervention and puts limits on the efficacy of national policies. Besides, the interdependence between domestic intervention and cross-border flows of transactions brings about the opportunity for political confrontation.  The simultaneous emergence of domestic unemployment and external deficits, for example, may signal the need for mutually conflicting improvements in the management of demand. The justification for the complementary external balance goal stems from the cross-border transactions' settlement and solvency consequences.  Conceptually, ex...

Why Do Different Countries Have Different Levels of Economic Development?

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  In the developed world, numerous countries are at very different levels of growth. All countries established on a hill slope, with the richest developed countries like Japan at the top and the poorest developing countries like Burkina Faso at the bottom of the hill, are called one model of economic growth.  The Newly Industrialized Countries (NICs), such as South Korea, are the better of developing countries. These will be halfway up the slope, below the lowest of developing nations, including Hungary, for example. Here are a few reasons why economic development differs amongst countries. Climatic conditions Any extreme temperature, such as being too hot, too cold, too wet or too dry, would delay growth. Many African nations are found in arid, very hot climates. This makes food processing hard. Many of these countries are vulnerable to drought and famine, such as Burkina Faso, for example. Some of the poorest, least developed countries, such as Mali and Chad, are in the Sah...

Why Does a Developed Country Focus On Smaller Countries for FDI and Exportations of Products?

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In the early 1980s, global FDI flows have been rising quickly — more rapidly than either world exchange or world development and are now credited to approximately 54,000 transnational companies. In 1980–97, the real annual FDI outflow rates for global exports of commodities and non-factor services rose by around 13%, compared with average rates of 7% and world GDP (current prices) for 1980–96.   For the seventh consecutive year, worldwide FDI inflows rose to some $430-440 billion and outflows for the third consecutive year in 1998. (Global FDI flows determined by annual inflows should, in general, be equal to those calculated by annual outflows;, however, they are not due to variations in national methodology and coverage).   For developed countries, FDI has developed into a significant source of private foreign financing. The fact that it is driven largely by investors' long-term prospects for making a profit on the development sector, which they personally manage, is som...