Gross Domestic Product (GDP)

Gross Domestic Product (GDP): total dollar value of all final goods and services produced within a country's borders within a given

• Whats included in GDP?

 C + Ig + G +Xn
-C: Consumption: takes 67% of the economy; final goods and services
-Ig: Gross private domestic investment; factory equipment maintenance, new factory equipment, construction of housing, unsold inventory of products built in a year
-G: Government spending Ex: buying new weapons, fort bend buying a new school
-Xn: Net exports; basically exports-imports

• What's not included in GDP?

1. Used or secondhand goods
2. Intermediate goods: goods and services that are purchased for resale or for further processing or manufacturing
3. Non-market activities: volunteer work, babysit, illegal drug sales, trading, underground activities
4. Financial transactions: stocks, bonds, real estate
5. Gifts or transfer payments: scholarship, Christmas gift, social security, welfare payments 
6. Foreign

Gross National Product (GNP): measure of hat its citizens produce and whether they produce these items within its borders

National income accounting: Economists collect statistics on production, income, investments, and savings