GDP

GDP

Stands for gross domestic product; measures the monetary value of final goods and services produced in a country in a given period.

What does GDP measure?

The monetary value of final goods and services produced in a country in a given period of time.

Factors not included in GDP

Unpaid work, black market activities, environmental damage, and distribution of GDP are not accounted for in GDP.

Real GDP vs. Nominal GDP

Real GDP is adjusted for inflation, while Nominal GDP is measured at current prices without adjustments for inflation.

Human Development Index (HDI)

A measure that ranks countries based on GDP per capita as well as other factors like life expectancy and literacy.

Limitations of GDP

GDP does not measure overall standard of living or well-being and may not account for quality of life factors.

Production not included in GDP examples

Examples include unpaid childcare, home-cooked meals for family, volunteering, and black market activities.

Negative impacts of production

GDP does not capture negative impacts such as pollution or environmental degradation caused by production.

GDP Growth Impact

An increase in real GDP indicates that the economy is doing well, typically leading to higher employment and better living standards.

Cycles of GDP growth

Real GDP growth occurs in cycles, with periods of boom and recession; recessions are often characterized by two consecutive quarters of decline.