Gross Domestic Product

What is Gross Domestic Product?

The total market value of all final goods and services produced during a given period of time.

Formerly called Gross National Product (GNP)

The most common measure of the level of economic activity at the national level.

Categories of Spending

Consumer Spending (personal consumption expenditures) – 65%

Business Spending (gross private domestic investment) – 13%

Government Spending (government purchases of goods and services) – 21%

Net exports of goods and services – 1%

What GDP Does Not Measure

Non-market activities The underground economy Goods and services not

sold Improvements in efficiency Changes in the quality of

goods and services produced

The quality of people’s lives

How the Top Five Nations Size Up

Rank (2012) Country GDP (Millions USD)

--1

European UnionUnited States

$16.2 Trillion$14.5 Trillion

2 China $6.9 Trillion

3 Japan $5.9 Trillion

4 Germany $3.6 Trillion

5 France $2.8 Trillion

How the Top Five Nations Size Up

Country GDP Growth Rate Per Capita GDP

United States 2.2% (↓ 3.40%) $45,959

Japan 1.9 % (↓ 2.80%) $34,402

Germany 2.6% (↑ 2.20%) $40,315

China 11.9% (↑ 10.50%) $2,459

Great Britain 2.9% (↑ 2.70%) $45,626