Gross Domestic Product

Gross Domestic Product

• economist collect statics on production, in came investment and savings.
• this is called national income accounting
• most important measure of growth is GDP

GDP- Total Dollar value, of all final goods and services

• produce within a countries borders within a given year

GNP (Gross National Product)

- the total value of all final goods and services, by citizens of that country, on its land or foreign land 

WHAT IS NOT INCLUDED IN GDP

Intermediate Goods

- no multiple counting, only count final goods

-the car manufacturer cant count the extra parts

- cant  count second hand or used goods

Non Market Activity 

-selling drugs

-baby sitting

-volunteering 

Financial Transactions

-stocks

-bonds

-real-estate

Gifts

-social security/transfer payment

-scholarship

WHAT IS COUNTED IN GDP

C- Consumption 

-67% of the economy 

-All finished goods and services

Ig- Gross Private Domestic Investment

- new factory equipment

-construction of housing 

-factory equipment machinery

-unsold inventory products built in at year

G-Government spending

- anytime gov't purchases goods and services

Xn- Net exports

-exports 

-imports