Gross Domestic Product
What is the Gross Domestic Product?
- Differentiate the product, income, and expenditure approaches to calculating GDP
- GDP per capita is often considered an indicator of a country's standard of living.
- The product approach sums the outputs of every class of enterprise to arrive at total GDP.
- The expenditure approach works on the principle that all products must be bought by a consumer; therefore, the value of the total product must be equal to consumers' total expenditures.
- The income approach measures GDP by adding the incomes that firms pay households for factors of production: wages for labor, interest for capital, rent for land, and profits for entrepreneurship.
gross domestic income; the total income received by all sectors of an economy within a nation.
Gross Domestic Product (Economics). A measure of the economic production of a particular territory in financial capital terms over a specific time period.
- per capita
- The value of all the goods and services produced in the United States in 2011 (GDP) was around $15 trillion.
GDP is the value of all the final goods and services produced in a country during a given time period. Intermediate goods are not counted because they would cause double-counting to occur. GDP only refers to goods produced within a particular country. For instance, if a firm is located in one country but manufactures goods in another, those goods are counted as part of the manufacturing country's GDP, not the firm's home country. BMW is a German company, but cars manufactured in the U.S. are counted as part of the U.S. GDP. GDP is a measure used by economists to determine how productive a country is on the whole.
GDP per capita is often considered an indicator of a country's standard of living. Under economic theory, GDP per capita exactly equals the gross domestic income (GDI) per capita.
GDP Categories - United States
Components of U.S. GDP
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