1 / 9

The Components of GDP (Gross Domestic Product)

The Components of GDP (Gross Domestic Product). Tonya Blevins ECO2072 Summer 2011. Index. Slide 1: Title Slide 2: Index Slide 3: Introduction Slide 4: Consumption Slide 5: Investments Slide 6: Government purchases Slide 7: Net Exports Slide 8:How GDP relates to economics

nissim-mercer
Download Presentation

The Components of GDP (Gross Domestic Product)

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Components of GDP (Gross Domestic Product) Tonya Blevins ECO2072 Summer 2011

  2. Index • Slide 1: Title • Slide 2: Index • Slide 3: Introduction • Slide 4: Consumption • Slide 5: Investments • Slide 6: Government purchases • Slide 7: Net Exports • Slide 8:How GDP relates to economics • Slide 9: Conclusion

  3. The Components of GDP • GDP measures market value of goods/services • GDP also measures income/expenditures • GDP is broken into four components: • Consumption • Investment • Government Purchases • Net Exports • Y=C+I+G+NX

  4. Consumption (C) • Spending by households on goods/services. • Can be durable or non-durable • Durable includes: appliances and automobiles • Non-Durables includes: food and clothing • Consumption excludes purchases of new housing • Intangible services include: medical care

  5. Investments(I) • The purchase of goods for future use. • The sum of equipment, inventories, and structures. • Includes the purchasing of new housing

  6. Government Purchases (G) • Spending on goods/services by federal, local, and state government. • Includes the following: • Salaries of government workers • Expenditures on public works

  7. Net Exports (NX) • Domestically produced goods by foreigners (exports). • Foreign goods by domestic residents (imports)

  8. How GDP relates to Economy? • Y=C+I+G+NX calculates growth of the economy in the United States • From 1965-2010 GDP increased 3% per year. • Periods of declination = recession (figure 2, pg 503) • Recession = unemployment & bankruptcy • Higher GDP = better way of life

  9. Conclusion • GDP measures goods/services produced in the nation. • Goods/services measured during given time period. • Also measure Total income/Total Expenditures • Four Components: • Y=C+I+G+NX • Higher GDP = better way of life

More Related