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Measuring the Economic

Activity And How It is


Important For Business

Economic activity

The production, distribution, and consumption of


commodities.

https://www.google.com.pk/search?
q=impact+of+gdp+on+small+business&hl=en&authuser=0#hl=enPK&authuser=0&q=economic%20activity%20definition

Measures of economic
activity
GDP, GNP and NNP

GDP per Capita


Unemployment Rate
Productivity
Personal Income
Retail Sales
Inflation .Interest rates

https://countrydata.bvdep.com/version-2012413/E
IU/Help/measuringeconomicactivity.htm

reading

GDP, GNP and NNP


Gross Domestic Product. GDP is the total of all economic
activity in one country, regardless of who owns the productive
assets. For example, the UK's GDP includes the profits of a
foreign firm located in the UK even if they are remitted to the
firm's parent company in another country.
Gross National Product. GNP is the total of incomes earned
by residents of a country, regardless of where the assets are
located. For example, the UK's GNP includes profits from UKowned businesses located in other countries.
Net National Product. The "gross" in GDP and GNP indicates
that there is no allowance for depreciation (capital
consumption), the amount of capital resources used up in the
production process due to wear and tear, accidental damage,
obsolescence or retirement of capital assets. Net national
product is GNP less depreciation.

Whats the difference between


GDP and Economic Activity ?

How do interest rates affect business


activities in our economy?
Interest rates can encourage or discourage
borrowing and spending.
Lower interest rates allow consumers
greater spending power, which increases
demand, productivity, and employment.
Businesses often pass on the cost of higher
interest rates to consumers.

Circular Flow of Economic


Activity
TheFlowof Goods, Services & Resources. Learn
about the simple model used to describewhere
money goes and what it is exchanged for in a
marketeconomy. The circular flowmodel
ofeconomic activity shows you the basic
relationships between households, firms and the
government ...

Small business importance In an


established economy
A January 2012 reportfrom the SBAs Office of
Advocacy found: Small businesses continue to be
incubators for innovation and employment growth
during the current recovery. Small businesses
continue to play a vital role in the economy of the
United States. They produced 46 percent of the
private nonfarm GDP in 2008 (the most recent
year for which the source data are available),
compared with 48 percent in 2002.
http://www.sbecouncil.org/about-us/facts-and-data
/

Economic activity and its impact on


business
Read the article
Ans the question after the reading (Ans should include the
rational arguments)
In which economy you want to invest ?
Under-developed
Developed
Developing

Standard of living in Pakistan. With a per capita GDP


of$4736(PPP, 2014) in 2014. the World Bank considers Pakistan
a lower Middle-income country, it is also recorded as a "Middle
Development Country" on the Human Development Index 2015.
Will u want to invest in Pakistan? If yes , why ? If not, why ?
If the Ans is yes, why the direct investment in Pakistan is low?
If no, why the above statement is good for other country rather than
Pakistan?
Did u feel that GDP and other measures of economic activity (that
you studied in previous slides) isnt sufficient ?

Is the small business important for an economy ?


(give reason, by reading the article, argument
should include the Statiscal measure)
Check list
What is economic activity? How it can be measure?
Is that measures are always important in business,
for small and medium enterprises
Circular flow of economic activity, and how much
importance of business in that flow?

Important links
http://kalyan-city.blogspot.com/2011/03/what-are-e
conomic-activities-types-of.html
http://www.ehow.com/info_8552885_gdps-effect-bu
siness.html
https://countrydata.bvdep.com/version-2012413/E
IU/Help/measuringeconomicactivity.htm
http://
smallbusiness.chron.com/relationship-between-gr
oss-domestic-product-business-cycle-21751.html
http://www.statssa.gov.za/?p=1143

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