Measuring Economic Performance: Macroeconomic Basics (GDP)

Gross Domestic Product

Total income level earned by everyone in a country

• it’s how we judge economic performance

income, economy, spending, output

GDP measures

• the total ? of everyone in the national ?

• the total ? on the economy’s ? of goods / services

eqautes

GDP measures income and spending since one person’s spending basically ? to another person’s earnings

Gross Domestic Product (GDP) definition

The market value of all final goods and services produced within a country in a given period of time

adds, single, economic, subjective

1. Market Value

GDP ? different products / services into one ? measurement of ? activity

• though value is ?, GDP doesn’t really care that much

  • whatever’s listed is whatever you just use

legally, illegal, both, home

2. Of All

GDP includes all items produced in the economy that are sold ? in markets

• that means there are absolute zero ? transactions

• that also means that items that are ? produced and consumed at ? don’t count either

final, intermediate, construction, inventory

3. Final

Goods that are considered for GDP are in their ? form (ready-to-be consumed)

• ? goods / services are those that were used in the ? of the aforementioned goods

  • we don’t count these types of goods since that’d technically be a double counting of the money

    • the only exception to this rule is when (word from earlier) goods are added to an ? in which they are added to the current year’s GDP and their specific value is removed from whatever year they were used for (first type) goods

tangible, intangible

4. Goods and Services

GDP includes

• ? goods

• ? services

current, used, don’t

5. Produced

GDP only includes goods and services produced in the ? year

• this means any previously ? goods / services ? count

  • even if you buy an old item that was never sold, that GDP goes to the original year of its production (Ford for example)

within, country, nationality, national, citizens, location

6. Within A Country

GDP measures economic productivity specifically ? a ? (regardless of your ?)

• There’s an alternative to this called Gross ? product which measures the productivity of ? regardless of their ?

period, quarters, future, growth, problems

7. In a Given Period of Time

We calculate GDP within specific ? of time, typically ?

• this can help project ? performance and help focus long-term ? and minimize short-term ?

Net (Domestic / National) Product

Just GDP / GNP minus losses from depreciation

• specifically the word net instead of gross

Personal Income

Income of households and non-corporate businesses

• all pre-tax, aka “gross”

Disposable Personal Income

Income of households and non-corporate businesses

• all taxes are taken out, aka “net”