2. What Does Gross Domestic Product
–GDP Mean?
The monetary value of all the
finished goods and services
produced within a country’s
borders in a specific time period
3. What Does Gross Domestic Product –
GDP Mean?
• Though GDP is usually calculated on an
annual basis. It includes all of private and
public consumption, government
outlays, investments and exports less
imports that occur within a defined
territory.
4. What Does Gross Domestic Product –
GDP Mean?
• Though GDP is usually calculated on an
annual basis. It includes all of private and
public consumption, government outlays,
investments and exports less imports that
occur within a defined territory.
GDP = C + I + G + (X-M)
5. GDP = C + I + G + (X-M)
“C” is equal to all private
consumption, or consumer spending,
in a nation’s economy
Example: buying my wife a new car
6. GDP = C + I + G + (X-M)
“I” is equal to investment or the sum
of all of the country’s spending on
capital
Example: Buying new TV’s for a sport
bar.
7. GDP = C + I + G + (X-M)
“G” is the sum of government spending includes
any money spent by the government on goods
and services.
Example: sending supplies to Iraq or building
a new school.
8. GDP = C + I + G + (X-M)
“X-M” is the nations total net exports,
calculated as total exports minus total imports
(X-M = Exports - Imports) For the past 40 years
this has always been a NEGATIVE number.
Example:
China buying Ford Trucks (Exports) Americans
buying Japanese computers (Imports)
9. GDP = C + I + G + (X-M)
10.048 = 6.81 + 2.87 + 1.75 + (1.13 – 1.52)
