The Gross Domestic Product Is Often Used as a Measure

question 16

Essay

The gross domestic product is often used as a measure of the economic performance of a country. The annual GDP of Australia for the years 1990-98 is shown in the following table. Use the CPI in Table 23.2 in the textbook (pp 966-7) to deflate these figures to 1993 dollars. $$\begin{array} { | c | c | } \hline \text { Year } & \text { GDP (millions of current \$) } \\\hline 1990 & 382936 \\\hline 1991 & 395493 \\\hline 1992 & 404914 \\\hline 1993 & 425841 \\\hline 1994 & 448289 \\\hline 1995 & 473463 \\\hline 1996 & 507527 \\\hline 1997 & 531045 \\\hline 1998 & 563284 \\\hline\end{array}$$ Source: Australian Bureau of Statistics, Australian Economic Indicators, ABS Cat. No. 1350.0, ABS, Canberra.

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Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent ones, preparing the books for the next period.

Customer Refunds Payable

A liability account representing the amount of money owed by a company to customers for returned goods or cancelled services.

Net Income

The total profit of a company after all revenues and expenses, including taxes and interest, have been accounted for.

Statement Of Cash Flows

A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year.