Ex. 12. Translate into Russian:

The argument in favour of using GDP is not that it is a good indicator of standard of living, but rather that (all other things being equal) standard of living tends to increase when GDP per capita increases. This makes GDP a proxy for standard of living, rather than a direct measure of it. If GDP isn't a mea­sure of welfare, then what is it? What's it good for? Just this: GDP is a measure of the speed at which the economy is running. That's all. It isn't a precisely accurate measure but it's pretty good. It's good enough to tell us when the economy is clicking along well and when it's slowing down and by about how much. That isn't everything. But it's a lot.

Ex. 13. Translate into Russian:

GDP is one way of measuring the total output of an economy. GNP is another method. GDP is the sum value of all goods and services produced within a country. GNP narrows this definition a bit: it is the sum value of all goods and services produced by permanent residents of a country regardless of their location. The important distinction between GDP and GNP rests on differences in counting production by foreigners in a country and by nationals outside of a country. For the GDP of a particular country, production by foreigners within that country is counted and production by nationals outside of that country is not counted. For GNP, production by foreigners within a particular country is not counted and production by nationals outside of that country is counted. Thus, while GDP is the value of goods and services produced within a country, GNP is the value of goods and services produced by citizens of a country.

Ex. 14*. DISCUSSION QUESTIONS

1. Prove the importance of using the GNP/GDP concept as a measure of economic performance.

2. In Belarus the economists refer to GDP when measuring the nation’s economic performance. Why? Give your suggestions.

3. Does a Japanese-owned automobile factory in the US count in US GDP or in Japanese GNP?

4. In one of the reports to the US Congress in 1934 there was mentioned some information about the limits of GDP: “...the welfare of a nation can scarcely be inferred from a measure of national income. If the GDP is up, why is America down? Distinctions must be kept in mind between quantity and quality of growth, between costs and returns, and between the short and long run. Goals for more growth should specify more growth of what and for what.” Discuss this opinion with your group-mates.

Ex. 15. Speak about measuring economic performance.