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One problem in using exchange rate when comparing GDP per capital between countries is that is fluctuates a lot. A way of avoiding dependence on exchange rate is to use purchasing power.
GDP is a flow!
Lastly, note that GDP is a flow variable, not a stock variable. By a flow variable we mean a variable which is measured in something per unit of time. If you fill a bath tub you may fill it at 40 liters per minute - a flow - whereas the tub itself may comprise 200 liters - a stock. Similarly, income is flow (you may make 9 euro per hour) whereas the amount of money you have in your bank account is a stock (you would never claim that you have 2400 euro 'per month' in your account - you have 2400 euro period).
GDP, being a flow, isn't a measure of the total wealth of a country however a measure of the 'income' of the country during a particular period of time. Sure if GDP is high, it is very likely that total wealth of the country is increasing over time (some wealth is lost to depreciation). Consequently there is often a connection between what we perceive as a 'rich' country and a high GDP per capita.
Liberalisation and Changing Sectoral Composition of FDI: The latest is the ICT wave that has influenced the global shift in service industries the most. Therefore, these flow
Real Exchange Rates (EXCH) is the next variable that will be analysed in this VAR. The reason for including exchange rates in the VAR is that they are an important channel through
Discuss what policy changes he might be likely to propose with respect the issue that you identified as one about which he might be concerned.
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An unanticipated demand-pulled inflation would normally lead to all the following problems except?
what is the difference between classical and non-classical model
Using an aggregate demand and supply diagram, explain how each of the following scenarios affects the equilibrium price level and aggregate output a/Consumers expect a recession b/
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Who is considered unemployed?
what does international trade fails to its claims ?
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