GDP

GDP (Gross Domestic Product) What is it? The value of production within a country’s boundaries GDP is the most inclusive measure of an economy's output.

Calculating GDP GDP = Consumer Spending(C) + Investment Spending (I) + Government Spending (G) + Net Exports (Exports (X) minus Imports (M))

C + I + G + (X-M) = GDP

Dollar amounts in trillions 2008 $14.830 -0.3% 2009 $14.419 -2.8% 2010 $14.784 2.5% 2011 $15.021 1.6% 2012 $15.355 2.2% 2013 $15.612 1.7% 2014 $16.013 2.6% 2015 $16.472 2.9% 2016 $16.716 1.5% 2017 $17.093 2.3% Dollar amounts in trillions

Aggregate Demand and Aggregate Supply

Aggregate Demand What is it? Aggregate demand shows the total quantity of goods and services consumers are willing and able to purchase at any price level

Aggregate demand for an economy is divided into the following components: Consumption Investment spending Government Spending Net Exports (exports minus imports) Changes in any of these components will cause the aggregate demand curve to change.

Aggregate Supply What is it? Aggregate supply shows the total quantity of final goods and services producers are willing and able to supply at every price level

The aggregate supply curve can increase or decrease for several reasons: If an economy expands with higher population If productivity increases

Reasons for DECREASE in Aggregate Supply: If there are higher prices for key inputs such as labor or oil