Gross Domestic Product

Gross Domestic Product

Gross Domestic Product

• Gross= Total

• Domestic=Within the country

• Product= Final Items Made

• GDP= Dollar Value of Final Goods and Services Produced in a country in 1 year

Calculating GDP

• In this class, we use the expenditures approach... the amount spend on final goods and services to calculate GDP

• GDP=C+I+G+(X-M)

Multiple Choice

What is the equation of GDP?

• C+T+G+(I-E)

• C+I+G+(I-E)

• C+T+G+(N)

• C+I+G+(X-M)

Multiple Choice

Which of the following would be excluded from GDP?

• Road

• Yardsale

• Childcare

• Car

More to GDP

• There are calculation/manipulations that are made to GDP to make it more helpful in measuring health

• Adjust for inflation

• Divide by population to understand how many people are making those items

Real GDP

• Real GDP is adjusted for inflation

• GDP is calculated by multiplying prices times quantities

• Real GDP using prices from a past year, to hold that variable constant

• Price* quantity=GDP

Multiple Choice

GDP adjusted for inflation is called

• Accurate

• Adjusted

• Real

GDP Per Capita

• GDP/Population=GDP per Capita

• By dividing the GDP of a country by its population, it helps us understand how productive the country is compared to other similar countries, and also how those goods ands services are distributed

• Measure of the impact of scarcity on that country

Multiple Choice

What does "per capita" mean

• per person

• per country

• per usual

Multiple Choice

How do you find GDP per Capita

• Population/GDP

• GDP/Population

• GDP/Price Level

Poll

Is GDP a relevant measure of economic health?

• Yes

• No