The Philippines' biggest import partners are the United States (10.8%), Japan (10.8%), China (10.1%), and South Korea (7.3%).
|Section 6: Interpretation of Gross Domestic Product|
|Macroeconomics - Unit 3|
Real Gross Domestic Measures Production of Final Products
Real Gross Domestic Product measures the inflation-adjusted total or aggregate production of final products produced in a country during a period of time. The higher real GDP, the more productive the country is during that year. The more the country produces, the more goods and services its people enjoy for consumption and production. This usually means that the country has achieved a higher standard of living. There are a few instances, however, where a higher real GDP does not necessarily mean greater happiness or a greater standard of living. These instances include environmental concerns and issues related to lack of leisure time.
There is recent evidence that in industrialized countries, economic progress is best stimulated through freedom of competition and maximum opportunities for rewards to those who produce and contribute to technological advances. Certain government functions and regulations are essential for economic progress. However, in general, less government interference, fewer laws, and lower taxation, in the long run, have led to a more-prosperous economy and an improved environment.
On some issues such as global warming and the damage to rain forests, however, the jury is still out and probably will be for some time, as effects from these phenomena may not be evident for many decades or centuries.
Leisure Time and Stress
Does a higher GDP lead to more stress and a lower standard of living, because workers work more and enjoy less leisure time? Is there a direct relationship between increased production and increased work hours?
The income effect gives people more income when they earn higher hourly wages. This allows them to work fewer hours and still pay their bills.
For the average worker in industrialized countries, the workweek has shortened. This is evidenced by the considerable growth in leisure time-related industries. In general, therefore, as a country's real GDP increases, so does leisure time enjoyed by the average citizen. This means that most people's income effects outweigh their substitution effects. This leads to a decrease in the average number of hours worked per person. For more information about the average workweek and actual statistics from the Bureau of Labor Statistics, visit http://www.bls.gov/opub/cwc/cm20030124ar02p1.htm#18a (scroll down to the 9th paragraph).
Even though most people's income effects are greater than their substitution effects, not everyone chooses to enjoy more leisure time. Some individuals, tempted by financial rewards, choose to work many hours each week. These individuals' substitution effects are greater than their income effects.
|Last Updated on Tuesday, 25 December 2012 11:58|