Gdp Summary

Topics: Goods, Gross domestic product, Final goods Pages: 2 (539 words) Published: February 15, 2013
Macroeconomics is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets. Macroeconomists study aggregated indicators such as GDP, unemployment rates, and price indices to understand how the whole economy functions. More precisely, I want to talk about GDP which is Gross Domestic Product. GDP measures two things at once: 1. the total income of everyone in the economy. 2. The total expenditure on the economy’s output of goods and services. Why? Because for the economy as a whole, income must equal expenditure “for every buyer, there must be a seller.”

GDP is the market value of al final goods and services produced within a country in a given period of time. I will explain this definition precisely. GDP is the market value “GDP measures all goods in terms of their market value; you can’t compare apples and oranges. If an apple costs twice as much as an orange, then it contributes twice as much to GDP. Non-market activities like leisure, housework, and child care don’t contribute to GDP.” of all “GDP tries to be comprehensive” officially recognized final “international Paper makes paper, which is used by Hallmark to make a greeting card. In this example paper is an intermediate good and the greeting card is a final good. Since the value of the final good reflects the value of the intermediate good, only the value of the final good is included in GDP to avoid double counting” goods and services “goods include cars, food, clothing, etc. and services include haircuts, medical care, etc.” produced “GDP only include newly produced goods. If you buy a new car, which will contribute to GDP, but when you buy a used car, that will not contribute to GDP” within a country “US GDP counts all goods and services produced in the US. For example, a Canadian works in the US; his income counts in US GDP, but if US citizen works in Canada, his income doesn’t count in US GDP” in a...
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