1. The sum of the flow of all final economic goods and services
produced by the domestic economy during a relevant period of
time.
n
GDP 

i 1
P Qi
i

2. The set of rules and techniques used for measuring the
total flow of output (goods and services) produced and the
total flow of incomes generated by this production.

3. Includes:



Market Transactions:
(wages, interest, rent,
profits, ….);
Non-market Transactions:
(income-in-kind, ….);
Imputations: (home
consumption, rental value
of owner occupied housing
Excludes:


Market Transactions:
(illegal activities, used
goods, stocks and bonds,
underground economy,
capital gains and losses,
…);
Non-market Transactions:
(value of house persons)

4. 



Consumption Expenditures (C)
Investment Expenditures (I)
Government Purchases of Goods and
Services (G)
Net Exports (NX)
Y = C + I + G + (X – M)

5. 



Wages, Salaries and other Compensations of
Employees;
Rental Income;
Net Interest; and
Profits
 Unincorporated Income
 Corporate Profits

6. GDP = National Income
+ Indirect Business Taxes
+ Capital Consumption Allowances
+ Miscellaneous Adjustments
Business Transfer Payments
Inventory Valuation Adjustments
Statistical Discrepancies

7. DPI = National Income
- Social Insurance: Employers’ Share
- Corporate Retained Earnings
- Corporate Taxes
+ Government Transfer Payments
+ Business Transfer Payments
+ Miscellaneous Payments to Individual
- Personal Taxes

8. Gross National Product (GNP):
GNP = GDP
+ Factor Payments From Abroad
- Factor Payments to Abroad
Net National Product (NNP):
NNP = GNP
- Capital Consumption Allowances

9. Real GDP = Nominal GDP / GDP Deflator
Nominal GDP a.k.a. Current Dollar GDP
Real DGP a.k.a. Constant Dollar GDP
GDP Deflator is A Price Index

10. An index or prices shows the average percentage change that has occurred
in some group of prices over some period of time.

11. 
Consumer Price Index (CPI)
 measures changes in the prices of commodities
commonly bought by households since some base
period

Producer Price Index (PPI)
 formerly known as the Wholesale Price Index,
measures changes in the prices of commodities
traded at the wholesale level

12. 
Implicit Price Deflator for GDP
 measures changes in the prices of the
commodities produced by the domestic economy
since some base period