Welfare and GDP

Welfare

The health, happiness, and fortunes of a group.

Growth

A measure of the value of output, often represented by GDP.

GDP (Gross Domestic Product)

The total output of a country in a given period, including consumption goods, investment goods, and government purchases.

Final Goods

Goods that are sold to the end consumer, excluding raw materials and capital goods.

Savings

The portion of income that is not consumed.

Inventories

Goods that are part of investment, representing unsold products.

Government Spending

The expenditure by the government on goods and services.

Transfer Benefits and Taxes

Items that are not included in the calculation of GDP.

Exports and Imports Process

GDP calculation involves exports (x) minus imports (z), resulting in net exports (x - z).

GDP Formula

GDP can be calculated using the formula: GDP = PaQa + PbQb + Pc*Q, where Pa, Pb, and Pc are prices, and Qa, Qb, Q are quantities of goods.

Measuring Economic Activity

Evaluating the total value of all goods and services produced, total earnings from factor services provided, and total spending on goods and services.