GROSS DOMESTIC PRODUCT

Mr. ParkEconERHS

What is GDP?Gross Domestic Product

What is GDP?Gross Domestic Product

GDP is considered to be the best indicator of determining the health of the economy of a country

Serves as the primary measure of the size and strength of an economy

Gross Domestic Product measures the market value of all final goods and services produced in the United States during a given time period, usually one year.

What counts towards GPD?

Only the value of final goods and services.

Calculating GDPGDP = C + G + I + NX

Calculating GDPConsumption (Haircuts, airline tickets, soup,

furniture) – 67%(C)

Investment (New physical capital) (I)

Government Purchases (spending by all levels of government for goods and services) (G)

Net exports minus net imports (NX)

GDPPGDP Per Capita

Take the GDP of a country and divide it by the number of people living in the country

Accurate?Potentially Misleading?