Main Measures of Economic Activity

In economics, one can come across such a notion as measuring the economic activity. To do this, we first find out what the economy is studying. As a sphere of public life, many know it, what it is, in the course. We will talk about the economy as a scientific discipline.

The origin of the concept of economics as a science

Appeared in ancient times, in antiquity. For the first time it is mentioned by the ancient Greek scientist Xenophon in the 5th century. BC. Ancient scientists have invested in this sense the way of housekeeping. This is understandable. Almost the entire economy in the understanding of Greek city-states consisted of small entrepreneurs and traders. Craftsmen, peasants, builders. There were no large state corporations in the East. This is due to the mild climate and the lack of the need to consolidate for irrigation works (as in the south) or purification (as in the north). The economy of the whole country consisted entirely of small shopkeepers. A kind of small individual entrepreneurs of our time. Such traders and shopkeepers are the main measures of economic activity of that time.

Economics as a science today

The modern economy is quite different, with powerful transnational enterprises and factories. At the present stage, this science will be divided into macroeconomics, microeconomics and the world.

What is microeconomics

This term slightly corresponds to the meaning of the original concept of "economy" in ancient Greece. Namely, it is a science that studies individual economic subjects, their relationships, problems, etc. In other words, independent enterprises within the country's economic sphere. Difficulties, legislation, mutual relations with each other and with the state.

Macroeconomics

A broader concept. She studies the economy as the whole sphere of social life. Problems of poverty, the labor market as a whole. It is in macroeconomics that the main measures of economic activity are applied. They are necessary to fully take into account the economic situation in the state.

Measurers of economic activity. Social studies as a school course

The values of economic activity give a complete picture of the process of production, distribution, consumption in the economy.

For example, let's take the situation in agriculture. The main measures of economic activity record the amount of milk produced. In 2010, the country produced 500 million tons of this product (the figure is taken for example and is not indicative of this year for this product). And the next year, economists say that the decline was 20 percent. This is an example of qualitative indicators by which the entire economic situation of milk production can be analyzed. Then they begin to understand what causes led to such a sharp fall.

The main measures of economic activity are:

• Gross national product (GNP).
• Gross Domestic Product (GDP).

Measurers of economic activity. The concept of GDP

Gross domestic product is an indicator of the sum of market prices of all final products within the country. What does it mean? Let's take the production of cars as an example. They consist of many parts and assemblies. Wheels, engines produced at different plants. If these units go as spare parts to the market, they are included in the GDP index. But if they are delivered to another plant and from them a finished car is manufactured, then their value in this indicator is not included, because In the final cost of the machines their price is laid. This is called the "final product", i.e. The one that is ready to go to the market. This is due to the fact that these figures are not artificially overstated for objectivity.

You can find such a thing as GDP per capita. This is nothing more than the sum of all produced final goods, divided by the number of residents in the country. But it is a mistake to believe that where there are more indicators, they live better. The quality of life is determined by other meters. The percentage of unemployment, the average level of salaries and pensions to basic prices for the main consumer basket (a set of products necessary for survival).

Gross national product (GNP)

Measurers of economic activity, such as GNP indicators, include the sum of final products, both domestically and abroad. For example, in Kazakhstan there is an enterprise registered in Russia. It regularly pays all local taxes, leases, but profits from this enterprise are taxed by Russian taxes. Thus, the production figures of this enterprise take into account the indicators of GNP, but do not take into account the GDP indicators. This is a broader concept. The gross national product already includes the gross domestic product plus the amount of final products outside the state.

The gross domestic product (GDP) speaks more about the macroeconomic situation within the country than the gross national product (GNP). Since the first depends on jobs, the level of production in the country, and therefore, a favorable economic and political climate. But GNP simply serves as an indicator of budget revenue.

There is also a real level and nominal level of economic indicators. This is true today for our country. GDP, for example, is measured in the ruble equivalent, and the real figure shows the currency one. Let us decipher this notion. The level of GDP for the year, for example, 1 million rubles. In dollars, this amount is 35 thousand. The next year, GDP increased to 1.5 million rubles. Nominal growth is 50 percent. But because of the devaluation of the national currency in dollar terms, growth - only 1 percent - to 38 thousand dollars. This is a vivid example of the manipulation of economic indicators.