![Page 1: WHAT’S IN GDP? From the Federal Reserve Bank of Atlanta](https://reader036.vdocuments.mx/reader036/viewer/2022070606/5a4d1b617f8b9ab0599ad9de/html5/thumbnails/1.jpg)
WHAT’S IN GDP?From the Federal Reserve Bank of Atlanta
![Page 2: WHAT’S IN GDP? From the Federal Reserve Bank of Atlanta](https://reader036.vdocuments.mx/reader036/viewer/2022070606/5a4d1b617f8b9ab0599ad9de/html5/thumbnails/2.jpg)
What is gross domestic product (GDP)? Currency value (such as U.S. dollar) of all
final goods and services produced within a country in a given period
Total income of a nation Measure of nation’s economic well-being Measure of a nation’s economic growth
from one period to the next
![Page 3: WHAT’S IN GDP? From the Federal Reserve Bank of Atlanta](https://reader036.vdocuments.mx/reader036/viewer/2022070606/5a4d1b617f8b9ab0599ad9de/html5/thumbnails/3.jpg)
What’s included in GDP? Consumption by households
Goods: groceries, clothes, iPods Services: haircuts, oil changes
![Page 4: WHAT’S IN GDP? From the Federal Reserve Bank of Atlanta](https://reader036.vdocuments.mx/reader036/viewer/2022070606/5a4d1b617f8b9ab0599ad9de/html5/thumbnails/4.jpg)
What’s included in GDP? Investment by businesses and
households Fixed assets for production New homes Inventories
![Page 5: WHAT’S IN GDP? From the Federal Reserve Bank of Atlanta](https://reader036.vdocuments.mx/reader036/viewer/2022070606/5a4d1b617f8b9ab0599ad9de/html5/thumbnails/5.jpg)
What’s included in GDP? Government expenditures by local,
state, and federal government Roads and schools
![Page 6: WHAT’S IN GDP? From the Federal Reserve Bank of Atlanta](https://reader036.vdocuments.mx/reader036/viewer/2022070606/5a4d1b617f8b9ab0599ad9de/html5/thumbnails/6.jpg)
What’s included in GDP? Net exports
Value of a country’s exports to other nations, less its imports from other nations
![Page 7: WHAT’S IN GDP? From the Federal Reserve Bank of Atlanta](https://reader036.vdocuments.mx/reader036/viewer/2022070606/5a4d1b617f8b9ab0599ad9de/html5/thumbnails/7.jpg)
What’s included in GDP? GDP = Consumption + Investment +
Government spending + Net exports
![Page 8: WHAT’S IN GDP? From the Federal Reserve Bank of Atlanta](https://reader036.vdocuments.mx/reader036/viewer/2022070606/5a4d1b617f8b9ab0599ad9de/html5/thumbnails/8.jpg)
What’s not included in GDP? Intermediate goods Used goods Underground production (black market) Financial transactions Household production Transfer payments
![Page 9: WHAT’S IN GDP? From the Federal Reserve Bank of Atlanta](https://reader036.vdocuments.mx/reader036/viewer/2022070606/5a4d1b617f8b9ab0599ad9de/html5/thumbnails/9.jpg)
Investment
(I)
Personal Consumpti
on Expenditu
res (C)
Government
(G)
Net Exports(NX)
Fixed Investment
Inventories
Exports
Imports
Nonresidential
Residential
GDP
What are the components of GDP?
GDP = C + I + G + NX
![Page 10: WHAT’S IN GDP? From the Federal Reserve Bank of Atlanta](https://reader036.vdocuments.mx/reader036/viewer/2022070606/5a4d1b617f8b9ab0599ad9de/html5/thumbnails/10.jpg)
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
How much of GDP is each component?
Consumption (PCE) 70 %
Investment 16%
Government 19%
Net Exports -5%
Component % of GDP
GDP 100%
Average Percent of GDP since 2003
Source: Bureau of Economic Analysis
![Page 11: WHAT’S IN GDP? From the Federal Reserve Bank of Atlanta](https://reader036.vdocuments.mx/reader036/viewer/2022070606/5a4d1b617f8b9ab0599ad9de/html5/thumbnails/11.jpg)
What is a good rate of growth?
![Page 12: WHAT’S IN GDP? From the Federal Reserve Bank of Atlanta](https://reader036.vdocuments.mx/reader036/viewer/2022070606/5a4d1b617f8b9ab0599ad9de/html5/thumbnails/12.jpg)
What GDP does not tell us Does not measure income distribution Does not measure non-monetary output or
transactions (e.g., barter, household activities)
Does not take into account desirable externalities, such as leisure or environment
Does not measure social well-being Correlates to standard of living but is not a
measure of standard of living
![Page 13: WHAT’S IN GDP? From the Federal Reserve Bank of Atlanta](https://reader036.vdocuments.mx/reader036/viewer/2022070606/5a4d1b617f8b9ab0599ad9de/html5/thumbnails/13.jpg)
Check for Understanding Grab a 3 x 5 card Put your name and date on the front On the back, answer
“In your own words, what is GDP?