2337 GDP, etc - GDP, etc What is GDP? Gross Domestic...

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GDP , etc…
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What is GDP? Gross Domestic Product --- total market value of all final goods and services produced during a year by factors of production located within a nation’s borders. - Market Value - Final Goods AND Services - Within borders - Timeframe
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Excluded Transactions Financial T/A’s – see text… - Buy/Sell Securities (stocks, bonds, etc.) - Private T/F’s, Govt T/F’s (welfare, etc.) Used Goods Why not? 2 nd hand already included
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Other Excluded Household Production
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Other Excluded Non-Reported --- Cash Payments
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Other Excluded Illegal Activities
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GDP Limitations Non- Market T/A’s (Legitimate…) Quantity, not Quality Leisure ?? Environmental… Not always the best estimate of “social welfare”
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Expenditures Approach GDP = C + G + I + X N C = Consumption Expenditures I = Gross Private Domestic Investment G = Government Expenditures X = Net Exports (Exports Imports)
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GDP Components Consumption Durable, Non-Durable Services Largest component of GDP Government Federal, State, Local
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Investment - Capital Goods - Factories, Plants… - Inventories - Most Volatile Component
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Why is Investment the most volatile component to GDP? Many Variables
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This note was uploaded on 12/12/2011 for the course ECO 2118 taught by Professor Ligget during the Fall '11 term at University of Texas at Austin.

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2337 GDP, etc - GDP, etc What is GDP? Gross Domestic...

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