GDP: Gross Domestic Product

# GDP: Gross Domestic Product - Econ 4.3 Friday Announcements...

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Econ 4.3 Friday, February 12, 1999 Announcements: Homework #2 was collected at the beginning of class. Attendance was taken. Lecture notes: GDP: Gross Domestic Product US has the best statistics throughout the world 10,000 students \$1 million/10,000 = \$100 each \$1 billion/10,000 = \$100,000 each PSU Budget is larger than a billion dollars \$1 trillion/10,000 = \$100,000,000 each GDP = \$8,508.9 billion (1998) / 40,000 = \$212,722,500 There can be a rise of over 1 billion dollars during a period of 50 minutes Comparison Over Time Takes two years money value GDP Figure out if it represents Real changes or Price changes GDP = Current Dollar Price that exists at a certain time P 1 Q 1 + P 2 Q 2 + P 3 Q 3 + ... + PnQn = GDP Quantity Index: way of measuring things Price Index: Puts prices together P 1998 Q 1998 = GDP 1998 P 1997 Q 1997 = GDP 1997 Prices have changed (either up or down) There is a different GDP due to change in P, change in Q or a combination between the two P =Price Q =Quantity

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Unformatted text preview: • Base year = 1992 • (GDP/ Implicit Price Deflator)(100) = value of GDP in constant prices • 1992 GDP approximately \$3,233 billion • Real value of GDP = (GDP current \$/ Price index)(100) • Real value = (\$3,233 billion/100)(100) = \$3,233 billion • 1993 Invented Number • Current GDP = 3,780 Billion Dollars • PI = 108.7 • PI = base 100, prices increased by 8.7% during period of time • (\$3,780 billion/ 108.7)(100) = \$3,477 billion • \$574 billion increase, but actually \$244 billion • (\$3,780 billion/1,087) = \$3,477 billion • Both statements are correct • When politicians say economy increased and we are not better off then before they were in office it is because they are using different parts of the data Counting Bread (P) Value Added (V) Farmer Grain \$0.10 \$0.10 Grain Elevator \$0.20 \$0.10 Miller \$0.40 \$0.20 Baker \$1.10 \$0.70 Marketing \$1.30 \$0.20 Grocery Store \$1.70 \$0.40 Total Sales \$4.80 \$1.70...
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• Spring '99
• Fox
• gross domestic product, Value added, money value GDP, GDP Quantity Index, Number Current GDP

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