Gross Domestic Product - Focusonthe ExpenditureApproach...

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Gross Domestic Product: Focus on the: Expenditure Approach Professor Jermaine Whirl Information to use by students of East  Georgia College
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Why even study or measure the  economy? Remember from our discussions on economic history that truly  before 1776 there was no need for economists. Economic systems were in all other forms except for market  economies. Well in order for us to understand the fundamentals of the French  Physiocrats we must understand that they were upset with the  current economic conditions of France at the time.  Secondly, they argued to change the government's mercantilistic  ways and actually measure economic output. According to them, true economic freedoms and expansion can only  occur if we know how we are truly doing. Adam Smith took their writing along with David Hume to develop  the Wealth of Nations book that focuses on increasing the wealth of  the total nation and not just several members. – Today we focus on measuring the economy as a true means of  knowing where we stand in production, and to measure our  growth over time.
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GDP • GDP is the total market value of final goods   and services produced within the borders of a  nation during a fixed period of time. Ready  and Used for final consumption. – We only use final goods, because we don't want to  double count any intermediate goods that were  used in the production of final goods.
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GNP • Gross National Product is the value of final goods  and services produced by residents of the United  States, even if the production takes place outside the  United States. – Examples: Ford assembling vehicles in the UK or  Egypt. – GNP includes foreign production by U.S. firms,  but excludes U.S. production by foreign firms.
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Who Calculates it? • GDP & GNP Calculations are calculated by  the Bureau of Economic Analysis;  located  within the Dept of Commerce.
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