Download Ch. 13.1 notes

Ch. 13.1 notes: Measuring Nations
Output
I.
GDP- dollar amount value of all final goods
and services produced in a country in a year.
A. sampling method is used to determine
GDP ( # of goods, services times price = GDP)
B. intermediate products, like cost of a tire
on a new car, not in GDP
C. sale of used goods, not in GDP
D. must me made in U.S to count in GDP
E. non- market activities, like house work,
not in GDP
F. illegal activities, like drug purchases,
not in GDP
G. if GDP goes up, U.S is more productive
H. count only regular price, not sale price
I. Calculated every 3 mo.
J most important statistic in determining
how economy is doing
II. 5 other ways to measure how our economy is
performing ( GDP is the main way)
1. Gross national product (GNP)
2. Net national product (NNP)
3. National income (NI)
4. Personal income (PI)
5. Disposal income (DI)
A. GNP = GDP + the sale of U.S goods not
made in the U.S – the sale of non- U.S goods
made in the U.S
B. NNP= GNP – lost value of determining
equipment
C. NI = NNP – taxes
D. PI = income going to consumers before
taxes
E. DI = PI after taxes
III. Why is it important for GDP to go up
every year?
1. Our quality of living goes up.
2. Gov can collect & spend more
money
3. Less poverty and crime
4. U.S. can help other countries
IV. output expenditures model- calculates GDP by
looking at the 4 sectors of our economy that spend:
1.consumer spending
2. Investment spending by businesses
3. Gov. spending
4. Exports minus import spending
• http://www.mapsofworld.com/world-topten/world-top-ten-gross-domestic-countriesmap.html = top 10 GDP