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Measuring Economic Activity


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BF10 - Principals of Business and Finance
Measuring Economic Activity

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Measuring Economic Activity

  1. 1. UNDERSTANDING BusinessIn a Global Economy
  2. 2. Part1: Measuring Economic Activity
  3. 3. Gross Domestic Product
  4. 4. GDPA country’s total dollar value of all final goods and services produced in one year. GDP is the highly used measurement to determine a country’s overall economic output.
  5. 5. Categories OF GDP
  6. 6. Individual SpendingSpending by normal people for their everyday needs and wants such as: food, clothing, housing, and other spending.
  7. 7. Business SpendingSpending from all types of businesses to continue their operation such as: includes buildings, equipment, and inventory items..
  8. 8. Government SpendingSpending from government entities such as: paying employees and buying supplies and other goods and services.
  9. 9. Exports-ImportsGoods and services sold between countries.
  10. 10. GDPperCapitaThe value of goods produced per person in the country. This is equal to the country's GDP divided by the total number of people in the country.
  11. 11. Labor Activities
  12. 12. EmploymentThe unemployment rate includes the people of the labor force that are unemployed, are looking for work, willing to work, and unable to find work.
  13. 13. ProductivityThe measure of output per unit of input.
  14. 14. Consumer Spending Measurements of
  15. 15. PersonalIncomeThe total wages and salaries plus investment income and government payments to individuals.
  16. 16. RetailSalesThe sales of goods and services purchased to indicate the spending patterns.
  17. 17. Investment Activity
  18. 18. PersonalSavingsBusinesses and individuals use money deposited in personal saving accounts to buy equipment and/or products. Savers earn interest on money used by companies and other individuals. The savings rate of a country is an important factor for economic growth.
  19. 19. StockMarketHigher earnings for businesses increases their value, which causes a demand for people wanting to buy the businesses stock.
  20. 20. BondMarketBusinesses and governments issue bonds to borrow money. Bondholders earn interest on money loaned to businesses and government.