GDP GDP GROSS DOMESTIC PRODUCT WHAT IS IT

  • Slides: 13
Download presentation
GDP

GDP

GDP (GROSS DOMESTIC PRODUCT) • WHAT IS IT? • THE VALUE OF PRODUCTION WITHIN

GDP (GROSS DOMESTIC PRODUCT) • WHAT IS IT? • THE VALUE OF PRODUCTION WITHIN A COUNTRY’S BOUNDARIES • GDP IS THE MOST INCLUSIVE MEASURE OF AN ECONOMY'S OUTPUT.

 • CALCULATING GDP • GDP = CONSUMER SPENDING(C) + INVESTMENT SPENDING (I) +

• CALCULATING GDP • GDP = CONSUMER SPENDING(C) + INVESTMENT SPENDING (I) + GOVERNMENT SPENDING (G) + NET EXPORTS (X) MINUS IMPORTS (M))

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

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

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $14. 830 $14. 419

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $14. 830 $14. 419 $14. 784 $15. 021 $15. 355 $15. 612 $16. 013 $16. 472 $16. 716 $17. 093 -0. 3% -2. 8% 2. 5% 1. 6% 2. 2% 1. 7% 2. 6% 2. 9% 1. 5% 2. 3% Dollar amounts in trillions

AGGREGATE DEMAND AGGREGATE SUPPLY

AGGREGATE DEMAND AGGREGATE SUPPLY

AGGREGATE DEMAND • WHAT IS IT? • AGGREGATE DEMAND SHOWS THE TOTAL QUANTITY OF

AGGREGATE DEMAND • WHAT IS IT? • AGGREGATE DEMAND SHOWS THE TOTAL QUANTITY OF GOODS AND SERVICES CONSUMERS ARE WILLING AND ABLE TO PURCHASE AT ANY PRICE LEVEL

 • AGGREGATE DEMAND FOR AN ECONOMY IS DIVIDED INTO THE FOLLOWING COMPONENTS: •

• AGGREGATE DEMAND FOR AN ECONOMY IS DIVIDED INTO THE FOLLOWING COMPONENTS: • CONSUMPTION • INVESTMENT SPENDING • GOVERNMENT SPENDING • NET EXPORTS (EXPORTS MINUS IMPORTS) • CHANGES IN ANY OF THESE COMPONENTS WILL CAUSE THE AGGREGATE DEMAND CURVE TO CHANGE.

AGGREGATE SUPPLY • WHAT IS IT? • AGGREGATE SUPPLY SHOWS THE TOTAL QUANTITY OF

AGGREGATE SUPPLY • WHAT IS IT? • AGGREGATE SUPPLY SHOWS THE TOTAL QUANTITY OF FINAL GOODS AND SERVICES PRODUCERS ARE WILLING AND ABLE TO SUPPLY AT EVERY PRICE LEVEL

 • THE AGGREGATE SUPPLY CURVE CAN INCREASE OR DECREASE FOR SEVERAL REASONS: •

• THE AGGREGATE SUPPLY CURVE CAN INCREASE OR DECREASE FOR SEVERAL REASONS: • INCREASE - • IF AN ECONOMY EXPANDS WITH HIGHER POPULATION • IF PRODUCTIVITY INCREASES

 • REASONS FOR DECREASE IN AGGREGATE SUPPLY: • IF THERE ARE HIGHER PRICES

• REASONS FOR DECREASE IN AGGREGATE SUPPLY: • IF THERE ARE HIGHER PRICES FOR KEY INPUTS SUCH AS LABOR OR OIL