GDP Notes - a Does not count real estate resales E...

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GDP I. Components of GDP A. Over 70% of what the U.S. produces (GDP) is personal consumption (consumer spending) 1. U.S. companies are good at knowing what American consumers want B. 47% of GDP is services, not products 1. Includes everything from financial services to healthcare C. Goods or products are nearly a fourth of the economy 1. Non-durable goods are 16% of GDP a. Main types of non-durable goods are food, clothing, and fuel 2. Durable goods are 7% of GDP a. Durable goods include things like automobiles and furniture D. Business investment is 16% of GDP 1. Goods such as software, business equipment, and manufacturing 2. Does include construction of housing and commercial real estate
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Unformatted text preview: a. Does not count real estate resales E. Government spending is 20% of GDP 1. State and local governments produce 12% of GDP 2. Federal Government produces 8% of GDP a. Two-thirds is defense-related spending F. Imports and exports have opposite effects on GDP 1. Exports add (raise) GDP, while imports subtract from GDP a. Imports exceed exports, so net effect of trade is a deficit b. Imports are growing faster than exports due to job outsourcing in manufacturing G. GDP per capita is used to compare GDP between countries 1. Divides a country’s economic output by its population 2. Basically, total production value distributed evenly amoung nation’s people...
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