measuring economic activity
TRANSCRIPT
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UNDERSTANDING
Business I n a G l o b a l E c o n o m y
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Part 1:
Measuring E c o n o m i c A c t i v i t y
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Gross Domestic Product
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GDP A country’s total dollar value of all final goods and services produced in one year.
GDP is the highly used measurement to determine a country’s overall economic output.
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Categories
OF
GDP
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Individual
Spending Spending by normal people for their everyday needs and wants such as:
food, clothing, housing, and other spending.
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Business
Spending Spending from all types of businesses to continue their operation such as:
includes buildings, equipment, and inventory items..
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Government
Spending Spending from government entities such as:
paying employees and buying supplies and other goods and services.
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Exports - Imports Goods and services sold between countries.
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GDP per Capita The value of goods produced per person in the country.
This is equal to the country's GDP divided by the total number of people in the country.
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Labor
Activities
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Employment The unemployment rate includes the people of the labor force that are unemployed, are
looking for work, willing to work, and unable to find work.
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Productivity The measure of output per unit of input.
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Consumer
Spending
Measurements of
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Personal Income The total wages and salaries plus investment income and government payments to
individuals.
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Retail Sales The sales of goods and services purchased to indicate the spending patterns.
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Investment
Activity
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Personal Savings Businesses and individuals use money deposited in personal saving accounts to buy
equipment and/or products. Savers earn interest on money used by companies and other
individuals. The savings rate of a country is an important factor for economic growth.
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Stock Market Higher earnings for businesses increases their value, which causes a demand for people
wanting to buy the businesses stock.
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Bond Market Businesses and governments issue bonds to borrow money.
Bondholders earn interest on money loaned to businesses and government.