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Gross Domestic Product (GDP)

Gross Domestic Product (GDP). GDP. The dollar value of all final goods and services produced within a country’s borders in a given year Dollar value- selling prices of all goods and services Final goods and services- products in the form sold to consumers Not intermediate goods

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Gross Domestic Product (GDP)

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  1. Gross Domestic Product (GDP)

  2. GDP • The dollar value of all final goods and services produced within a country’s borders in a given year • Dollar value- selling prices of all goods and services • Final goods and services- products in the form sold to consumers • Not intermediate goods • Produced within a country’s borders- anything made in that country

  3. GDP • How do you find GDP? • Expenditure Approach • Add together the money spent on the following items • Consumer goods and services • Business goods and services • Government goods and services • Net exports or imports of goods and services

  4. GDP • Income Approach • More accurate • Adds up all the income earned by in the country’s economy • P. 302 illustrates the difference between the two

  5. GDP • Nominal GDP • GDP measured in current prices • Current year prices to evaluate current year output • Real GDP • GDP expressed in constant, unchanging prices • Looks at output more, rather than prices • P. 304

  6. GDP • Limitations of GDP • Non-market activities • Underground economy • Negative externalities • Quality of life • Gross National Product • The annual income earned by U.S. owned firms and U.S. citizens

  7. Assignment • Create a poster that explains how GDP works. • Your poster must include • Thorough explanation of how to measure GDP • Visual of how to measure GDP • Thorough explanation of the limitations of GDP • Visual of the limitations of GDP • Color • This poster is supposed to be able to explain how GDP works in a simpler manner, using pictures and visual aids

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