gross domestic product. copyright© 2006 southwestern/thomson learning all rights reserved. ●gross...
TRANSCRIPT
Gross Domestic Product
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
● Gross = Total
Domestic = in the country
Products = goods and services made
● GDP = sum of the money values of all final goods and services produced during a specified period of time within the country
● Gross = Total
Domestic = in the country
Products = goods and services made
● GDP = sum of the money values of all final goods and services produced during a specified period of time within the country
Gross Domestic ProductGross Domestic Product
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
Gross Domestic ProductGross Domestic Product
● What Gets Counted in GDP?♦ Only goods and services produced within the
year
♦ Only final goods and services
♦ Only production within the geographic boundaries of the United States
● What Gets Counted in GDP?♦ Only goods and services produced within the
year
♦ Only final goods and services
♦ Only production within the geographic boundaries of the United States
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
Which of the following would be included in the GDP?Which of the following would be included in the GDP?
● A car made by a Korean company in Kentucky?
● A cake made by a local bakery and sold to a caterer who will re-sell the cake to a couple getting married
● A used i-Pod sold on ebay
● A car made by a Korean company in Kentucky?
● A cake made by a local bakery and sold to a caterer who will re-sell the cake to a couple getting married
● A used i-Pod sold on ebay
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
Calculating GDPCalculating GDP
● Expenditure Approach
GDP = C + I + G + (E – I)
C = consumer consumption
I = business investment
G = government spending
(E – I) = exports minus imports
● Expenditure Approach
GDP = C + I + G + (E – I)
C = consumer consumption
I = business investment
G = government spending
(E – I) = exports minus imports
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
United States GDPUnited States GDP
Consumer 8,229 (70%)
Business Investment 1,927 (16.5%)
Government Spending 2,184 (18.6%)
Imports 1,782Exports 1,175 (-5.1%)
Total 11,734 (100%)
Consumer 8,229 (70%)
Business Investment 1,927 (16.5%)
Government Spending 2,184 (18.6%)
Imports 1,782Exports 1,175 (-5.1%)
Total 11,734 (100%)
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
Type of GDPType of GDP
● Real GDP = adjusted to remove inflation
● Per Capita GDP = GDP divided by the population of the country
● Real GDP = adjusted to remove inflation
● Per Capita GDP = GDP divided by the population of the country
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
US GDP = $137,500,000,000,000 Population = 301,139,947
European Union GDP = $144,000,000,000,000 Population = 490,426,060
China GDP = $7,040,000,000,000 Population = 1,321,851,888
US GDP = $137,500,000,000,000 Population = 301,139,947
European Union GDP = $144,000,000,000,000 Population = 490,426,060
China GDP = $7,040,000,000,000 Population = 1,321,851,888
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
World GDPWorld GDP
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
The World at NightThe World at Night
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
World GDP per capitaWorld GDP per capita
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
Global Warming and GDPGlobal Warming and GDP
http://environment.yale.edu/topics/page-2/3879/interactive_map_climate_change_and_gdp/http://environment.yale.edu/topics/page-2/3879/interactive_map_climate_change_and_gdp/
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
GraphingGraphing
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
GraphingGraphing
Pri
ce L
evel AS
AD
E
P1
Q1 Real GDP
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
● Economic Growth♦ Economic growth = GDP AD and/or AS growth
● Economic Growth♦ Economic growth = GDP AD and/or AS growth
Supply and Demand in MacroeconomicsSupply and Demand in Macroeconomics
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
● Economic Downturn (Recession)♦ Economic growth = GDP
♦ AD and/or AS growth
● Economic Downturn (Recession)♦ Economic growth = GDP
♦ AD and/or AS growth
Supply and Demand in MacroeconomicsSupply and Demand in Macroeconomics
Increase in demand = Increase in GDPIncrease in demand = Increase in GDP
Increase in output
Pri
ce
Le
ve
l
Real GDP
S1
D0
E
D1
A
Decrease in Demand = Decrease in GDPDecrease in Demand = Decrease in GDP
B
Pri
ce L
evel
S 1
D0
E
Real GDP
D2
Copyright© 2006 Southwestern/Thomson Learning All rights reserved.
BibliographyBibliography
● Graphics: Southwester / Thomson Learning
http://www.cengage.co.uk/
● Graphics: Southwester / Thomson Learning
http://www.cengage.co.uk/