GDP

GDP

measures the overall economy, is the market value of all final goods and services produced within a country in a given period of time

GDP per capita

measures wealth of population

GDP growth

measures direction of economy

Market value

GDP is measured in dollars

Final goods

are the finished goods sold to final users and consumed

Intermediate goods

used as components or ingredients in the production of other goods

GNP

Gross national product- the market value of all final goods and services produced by U.S residents

Why is GDP not the best measure of output?

Not the perfect measure of well being because: Illegal markets, non-market production, leisure time, the quality of the environment, equality.

GDP growth rate formula

Year 2-year 1/ year 1 × 100

nominal GDP

Values output using current prices, at the time of sale

GDP deflator calculation

100 * nominal/real

Real GDP

Values output using the prices of a base year