GDP Macroeconomics

What does GPD count for

Final/finished goods within that year

Intermediate good

products used to create a final good (ingredients/materials)

Which GPD is impacted from buying a imported foreign good?

The foreign GDP

List of final goods and services

consumer, business, government, net exports

Nominal GDP

current prices

Real GDP

old/constant prices

Formula for net exports

exports - imports

input

Production process, labor households to sell to businesses

output

the goods sold from production

each flow of real resources is matched by what?

an equal and opposite flow of money

what should market value of total output be equal to?

total spending

How to calculate total spending

add up every dollar

How to calculate total output?

adding up every dollar worth of output produced

How to calculate total income 

add up every dollar of income earned

investment 

spending on new capital assets that increase the economy’s productivity

limitations of GPD

prices are not values, excludes non-market activity, the shadow economy, environmental degradation does not count, leisure, ignores unequal distribution