Unit Two: Chapter 19- GDP (Part One)

GDP

Notes from (1/28/16)

GDP- Gross Domestic Product- The total market value of all final goods and services produced in a country's borders within a given year

GNP- Gross National Product- Total market value of all final goods and services by citizens of that country on its land or foreign land

INCLUDED:

C- Personal Consumption Expenditures- Whatever you want to spend money on, 65%

IG- Gross Private Domestic Product- Factory Equipment and Maintenance, Construction of Houses, Unsold Inventory of Products Built in a Year, 17%

G- Government Spending- Goods and Services bought by the government, 20%

Xn- Net Exports- Exports - Imports, -2%

C + Ig + G + Xn = GDP (Expenditure Approach)

EXCLUDED:

• Intermediate Goods- A good that requires further processing before it is ready for final use
• Used/ Secondhand Goods- Avoids DOUBLE COUNTING
• Purely Financial Transactions- (Stocks and Bonds)
• Illegal Activity- (Drugs)
• Unreported Business Activity- (Unreported tips)
• Transfer Payments
• Public- Social Security, Welfare
• Private- Scholarships
• Non-market Activity- Volunteering, Babysitting, and work performed for oneself

This was just the basics ;)

-JaelyNoTainted

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