2. GDP is the total value of all goods and
services produced in a country over a
specific period.
GDP is reported in two forms; constant and
current dollar.
Constant dollar converts current
information into base dollar.
Current dollar is based on existing market
conditions and compares two periods.
3. In U.S GDP can either be nominal GDP or real GDP.
Nominal GDP is recorded in billions of dollars while
real GDP is a percentage of a standard year.
The value of United States GDP has continued to
increase in value of the years with the highest value
recorded in 2010 at $ 14,526.5 billion (BEA, 2011)
Annual GDP growth is characterized by cyclic
period of boom and depression.
4. A graph of GDP against years
16,000.00
GDP (Billions of dollars)
14,000.00
12,000.00
10,000.00
8,000.00
6,000.00
4,000.00
2,000.00
0.00
1995
1996
1998
2001
2004
2007
2009
1997
1999
2000
2002
2003
2005
2006
2008
2010
Years Series1
5. %age change in GDP
-4.00%
-2.00%
0.00%
2.00%
4.00%
6.00%
8.00%
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Years
2001
2002
Annual GDP growth
2003
2004
2005
2006
2007
2008
2009
2010
6. Growth in GDP increased from 1994 up to
1997 but decreased in 1998 and then
increased up to 2000.
The economy registered a boom between
1998 up to 2000 reflected by increased
growth rate which increased by 6.39% in
2000.
In 2001 U.S GDP growth was recorded at
3.36%, growth was 3.46%, 4.70%, 6.38% in
2002, 2003, and 2004 respectively
7. 2006 had the highest growth in 2005
amounting to 6.49%.
In the subsequent period the economy
declined in performance evidenced by
reduced growth rates.
Annual growth registered amounted to
5.97% in 2006, 4.87% in 2007, and 1.87% in
2008, with the lowest being recorded in
2009 at -2.47%.
8. Personal consumption expenditure is the
main component affecting GDP.
Economic recession can be attributed to
decreased personal consumption
expenditure.
Decreased consumer purchasing power
leads lowers personal consumption
expenditure.
In 2010 the economy improved and growth
recorded at 4.21%.
9. In 2011 the economy or GDP is forecasted
to grow by 2.7 to 2.9%.
In 2012 the forecast is that GDP will grow
by 3.3 to 3.7% (The Economic Times, 2011).
Slow growth is due to increasing inflation in
the country.
Increased commodity prices increase
inflation.
Increased inflation reduces consumer
purchasing power leading to reduced
personal consumption expenditure.
10. GDP per capital is $ 48,666 (2010 estimates)
GDP contributing sectors include service
sector with 76.9%, manufacturing sector with
21.9% and agriculture sector accounting for
1.2% (2009 estimates).
Inflation in 2010 is 1.6% and projected
inflation in 2011 is 2.2%.
11. 2000 4.1% Real GDP
2001 1.1%
2002 1.8% 5.00%
2003 2.5% 4.00%
2004 3.6% 3.00%
2005 3.1% 2.00%
Real GDP
2006 2.7% 1.00% Series1
2007 1.95% 0.00%
2008 0% -1.00%
00
02
04
06
08
10
2009 -2.6%
20
20
20
20
20
20
-2.00%
2010 2.8%
-3.00%
Year
12. Two methods; income and expenditure
methods
The income approach sums up what
everyone has earned in that year.
Expenditure approach adds what everyone
spent.
Income approach adds up what firms pay
households for factors of production and
this includes wages pair for labor, rent paid
for land, interest for capital invested while
the reward for entrepreneurship is profits.
13. The expenditure approach assumes that all
products are bought by someone there adds
total consumption, government spending,
investments and net exports.
Income approach;
GDP = compensation of employees + gross
profit for firms + taxes – subsidies
Expenditure approach;
GDP = personal consumption + government
spending + investments + exports –
imports
14. Economic Expansion
provides that an increase in
the value of real GDP is
interpreted an improvement
in the economy while
decrease in GDP indicates
that the economy is
underperforming or is not
operating at maximum
capacity.
GDP is related to
employment, economic
growth and productivity
15. GDP is used to;
Determine a country’s productivity
Measure standards of living.
Evaluate how the economy is performing
16. DATA ON GDP AND ECONOMIC INFORMATION. (2011). Retrieved from Global
Finance: http://www.gfmag.com/gdp-data-country-reports/151-the-
united-states-gdp-country-report.html#axzz1s9ytNMsh
Economic Expansion (GDP). (2011, December). Retrieved from Russell
Investments: http://www.russell.com/helping-
advisors/Markets/EconomicIndicatorsDashboard/EconomicExpansion-
GDP.aspx
Federal Reserve cuts US GDP forecast; no hint of more support. (2011, June
23). Retrieved from The Economic Times:
http://economictimes.indiatimes.com/news/international-business/federal-
reserve-cuts-us-gdp-forecast-no-hint-of-more-
support/articleshow/8956240.cms
National Income and Product Accounts Table. (2012, March 29). Retrieved
from Bureau of Economic Analysis:
http://www.bea.gov/National/Nipaweb/Tableview.Asp?
Selectedtable=5&Viewseries=NO&Java=No&Request3Place=N&3Place=N&Fro
mview=YES&Freq=Year&Firstyear=1990&Lastyear=2010
What is GDP and why is it so important? (2007, September 19). Retrieved
from Investopedia:
http://www.investopedia.com/Ask/Answers/199.Asp#Axzz1aeuepbgk
