the components of gdp (gross domestic product)
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The Components of GDP (Gross Domestic Product). Tonya Blevins ECO2072 Summer 2011. Index. Slide 1: Title Slide 2: Index Slide 3: Introduction Slide 4: Consumption Slide 5: Investments Slide 6: Government purchases Slide 7: Net Exports Slide 8:How GDP relates to economics - PowerPoint PPT PresentationTRANSCRIPT
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Tonya BlevinsECO2072
Summer 2011
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Slide 1: Title Slide 2: Index Slide 3: Introduction Slide 4: Consumption Slide 5: Investments Slide 6: Government purchases Slide 7: Net Exports Slide 8:How GDP relates to economics Slide 9: Conclusion
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GDP measures market value of goods/services GDP also measures income/expenditures GDP is broken into four components:◦Consumption◦Investment◦Government Purchases◦Net Exports
Y=C+I+G+NX
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Spending by households on goods/services. Can be durable or non-durable Durable includes: appliances and automobiles Non-Durables includes: food and clothing Consumption excludes purchases of new housing Intangible services include: medical care
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The purchase of goods for future use. The sum of equipment, inventories, and structures. Includes the purchasing of new housing
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Spending on goods/services by federal, local, and state government.
Includes the following:◦Salaries of government workers◦Expenditures on public works
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Domestically produced goods by foreigners (exports). Foreign goods by domestic residents (imports)
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Y=C+I+G+NX calculates growth of the economy in the United States
From 1965-2010 GDP increased 3% per year. Periods of declination = recession (figure 2, pg 503) Recession = unemployment & bankruptcy Higher GDP = better way of life
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GDP measures goods/services produced in the nation. Goods/services measured during given time period. Also measure Total income/Total Expenditures Four Components:
Y=C+I+G+NX Higher GDP = better way of life