Question 8 Answer
(a) Gross Domestic Product (GDP) is the total money value of all output produced within a country over a year.
Gross National Product (GNP) is the total money value of all output produced over one year, both within a country and income earned from overseas.
Per capita GNP indicates the average income received by each person in an economy. This is calculated by dividing a country’s GNP by its total population.
(b) (i) Economic growth is the expansion of national income measured over time e.g. from one year to the next.
(ii) Education imparts knowledge and skill thus increasing productivity. A highly productive workforce will increase output levels.
Foreign Direct Investment refers to capital investment into factories, machinery and equipment by a foreign company or an individual. FDI therefore increases GDP as it increases the capacity of output.
Government programmes that assist cottage industries to expand output. They are supported though various government initiatives such as very low interest rate loans, entrepreneurial and skills training.
(c) Economic growth will result in an increased standard of living for citizens. More goods and services will be available for citizens locally as well as for exports. Goods exported will earn foreign exchange for a country.
Economic growth leads to development. This is sustained economic growth accompanied by policies that bring about structural changes such as increase in exportation, decrease in importation, lesser dependence on foreign aid and important infrastructural development. These changes will allow for higher levels of national income.