The GDP of Canada

Topics: Government spending, Macroeconomics, Gross domestic product Pages: 1 (577 words) Published: November 5, 2014

Gross Domestic Product, Which will be presented as the abbreviation GDP below, is a measure of the economic situation within a territorial area. Moreover, it is defined as Total market value of all goods and services that produced in the economy during a given time period. Personal Consumption Expenditure, equally important, refers to the fees paid by people in order to satisfy their daily needs. It’s an important indicator that measuring consumers’ spending levels on goods and services, for example, the spending on durable goods. Most of studies have showed there is a close relationship between GDP and Personal expenditure on consumer durable goods. The charts and graphs below will show how Canadian personal expenditure on consumer durable goods affects Canadian GDP. From the year 1989 to 2010 chart 1 and graph 1, it can be clearly seen that the GDP is increasing along with Personal expenditure on consumer durable goods. To be more Specific, GDP increased with a wide margin, and Personal expenditure on consumer durable goods rose slowly. The reason of it was durable goods are long-term good, which mean they can last at least three years, people need this goods but not buying successive. Therefore, it was increasing but only with a small margin. For the GDP, it is generally known that GDP is equal to Consumption Expenditure plus Gross Investment plus Government Spending plus Export minus Import. With the growth of Personal expenditure on consumer durable goods, which is a part of Consumption Expenditure, even if it was slow, but there were other components, such as Gross Investment, pushing GDP upward. Besides, from 2008 to 2009, they both decreased, because at that time, there was a global economic crisis, Canada had revenue of 521.6 billion dollars, expense of 578.7 billion dollar and deficit of 57.1billion dollars. (The Economics and Commercial Counselor’s Office of the Embassy of the People's Republic of China in Canada) At that time, people were not...
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