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Gross Domestic Product
Economics
E. Napp
1) Explain the following statement: “An ounce of prevention is worth a
pound of cure.”
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2) What was the worst economic collapse ever experienced in the United
States? When did it happen? What was the government’s response to
the collapse?
What? __________________________________________________
When? ___________________________
Government’s Response? ___________________________________
________________________________________________________
3) Government economists track the economy. They collect statistics
about the following areas. Discuss what these statistics reveal.
Unemployment Rate: _____________________________________
Number of Goods and Services sold: _________________________
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4) The most important measure of the economy’s health is the
Gross Domestic Product or GDP.
Complete this definition of Gross Domestic Product:
The Gross Domestic Product is the ____________ value of all final
____________ and ________________ produced in a ___________
borders in a given _____________.
So, the goods and services must be made in the ________________
but the businesses can be owned by ______________.
Key words: Made in the __________________
Would cars manufactured in Tennessee by a Japanese company be
included in the U.S.A.’s GDP?
YES
NO
5) Gross Domestic Product only includes the sale of final goods not
intermediate goods.
Why? _______________________________________________
____________________________________________________
Give an example of an intermediate good: ___________________
Give an example of a final good: ___________________________
6) To know if Gross Domestic Product has increased, it is important to
account for inflation.
Why? ___________________________________________________
What is inflation? _________________________________________
Give an example of how inflation could make GDP appear to rise
when in fact GDP has not risen.
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7) Gross National Product or GNP is a different statistic.
Fill in the following definition of Gross National Product:
GNP includes __________ earned by U.S. companies _________ of
the country, but does not include the _________ earned by
____________ firms doing business in the country.
8) Economists believe that Gross Domestic Product is a better indicator
of the economy’s health than Gross National Product. Why?
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9) So, what is the big difference between GDP and GNP?
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