Gross Domestic Product

Gross= Total

Domestic=Within the country

Product= Final Items Made

GDP= Dollar Value of Final Goods and Services Produced in a country in 1 year

In this class, we use the expenditures approach... the amount spend on final goods and services to calculate GDP

GDP=C+I+G+(X-M)

There are calculation/manipulations that are made to GDP to make it more helpful in measuring health

Adjust for inflation

Divide by population to understand how many people are making those items

Real GDP is adjusted for inflation

GDP is calculated by multiplying prices times quantities

Real GDP using prices from a past year, to hold that variable constant

Price* quantity=GDP

GDP/Population=GDP per Capita

By dividing the GDP of a country by its population, it helps us understand how productive the country is compared to other similar countries, and also how those goods ands services are distributed

Measure of the impact of scarcity on that country