1. GDP: Measuring the National Economy
By: Ben Quick

2. Gross Domestic Product (GDP)
The market value of all final goods and services produced within a country in a given period of time
Gross = total
Domestic = national (ex: United States)
Product = all goods and services produced
Gross Domestic Product (GDP)

3. Intermediate goods, secondhand sales, and nonmarket transactions are excluded from GDP
GDP tells nothing about the composition of output or the impact of production on quality of life
Despite it’s limitations, GDP is still the best measure of overall economic health
GDP (con’t)

4. The most common approach to measuring and understanding GDP is the expenditure method:
GDP = consumption + investment + government spending + (exports – imports)
GDP: C + I + G + F (or X)
Computing GDP

5. Allows a nation to compare it’s economy to other nations
Can be used to compare with past years using REAL GDP and applying the GDP price deflator*
Importance of GDP

6. Real GDP  is a macroeconomic measure of the value of economic output adjusted for price changes (i.e., inflation or deflation).
Real GDP

7. GDP Rankings (2014) Rank Country GDP (in millions) 1 United States
17,418,925 2
China
10,380,380 3
Japan
4,616,335 4
Germany
3,859,547 5
United Kingdom
2,945,846
GDP Rankings (2014)