Activity measure
| Activity measure |
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An activity measure is an indicator that shows the size, value or quality of a given phenomenon.
The measure of economic activity is processed statistical data that presents the situation in a given country and the standard of living of citizens.
The most important indicators of economic development:
- Gross domestic product,
- Gross national product
- Inflation rate,
- Purchasing power parity,
- Employment rate,
- Human development index.
Basic quantitative indicators
The gross domestic product is the market value of all goods and services produced in the country at a given time (usually during the year). There are three methods to measure GPD: income, expenditure and production method. In the "expenditure method", GDP is understood as the sum of expenditure incurred by households, government and enterprises over a given period. The income method informs about the amount of income generated by enterprises from their activities. The production method presents the indicator as the value of manufactured goods and services reduced by intermediate consumption and increased by taxes[1].
The gross national product is an indicator that takes into account the value of goods and services (as well as income or expenses incurred) generated (obtained) by the entire nation, including enterprises with branches in another country (outside the country)[2]. The GNP indicator comes from the GDP indicator. However, the measure of gross domestic product is the one which more closely reflects the situation in a given country.
The purchasing power parity it is an exchange rate calculated on the basis of prices of selected goods and services in several countries at the same time[3]. In order to calculate the purchasing power parity indicator, it is necessary to collect prices of comparable goods or services for the analyzed countries and to calculate the weighted average. It is considered that purchasing power parity is a better indicator than the stock exchange rate because it includes purchasing power.
Research on the development of society
The human development index it is an indicator that shows the degree of socio-economic development. HDI shows us the development of society on three levels: standard of living, life expectancy at birth and the level of education of the citizens of the country. HDI results can range from 0 to 1[4]. When calculating the social development indicator, you may often encounter problems, such as large amounts of data, data authenticity, or a problem with the expression of the indicator.
Activity based costing
Activity-based costing (also known as ABC method) is used to determine the amount of indirect costs per product. Thanks to this measurement method, we can determine calculations and the cost structure. Costs are allocated based on cost drivers. A measure of activity does not build costs, but the activities that generate them[5].
Footnotes
References
- Corona Brezina. (2011)., Understanding the Gross domestic product and the Gross national product, Rosen Publishing.
- Griffiths A., Wall S., (2007)., Applied economics., Prentice Hall.
- Ignatiuk A., (2009)., The principle, practice and problems of purchasing power parity theory., Grin Verlag.
- Lal J., Srivastava S., (2009)., Cost accounting.
- World Bank. (2013)., Measuring the real size of the world economy.
Author: Klaudia Broś
