Internal management in China

Lesson Four (2015/5/7)

Economic Indicator - GDP

1. the total value of the goods and services produced annually in a country
   

   $$GDP = C + I + G + X$$
   C: consumption
   I: inverstment
   G: government expenditure
   X: net export

2. Problems with GDP calculation:

   • It does not include sub-culture economies (SCEs).
   • The GDP calculation can be affected by the change in exchange rates and the value of currencies.
   • the change in the cost of living
   • the percentage of domestic consumption in GDP

Economic Indicator - Purchasing Power Parity (PPP)

1. A technique used to determine the relative value of different currencies.
2. Redefining GDP figures of each country with the same prices for goods and services
3. Avoiding the effect of changing exchange rates
4. United Nation: International Comparison Program (ICP)

Other Economic Indicator for International Management

1. market size: population and purchasing power
2. income distribution: how a nation's total GDP is distri buted among its population; an indication of the relationship between income inequality and economic growth
3. wage rates: rate of pay based on per unit of production or per period of work time on the job
4. World competitiveness Rankings
   
   • World Economic Forum
   • Would competitiveness Report
   • IMD World Competitiveness Yearbook Ranking