| Admit it! It's happened to you too. You know what I'm | | | | and 2 blankets the next year. Which year was there |
| talking about- you're sitting there sipping your coffee | | | | greater GDP? In order to answer that, we need more |
| while reading the Business section of the New York | | | | information because gross domestic product is |
| Times when you come across an article that goes on | | | | expressed in dollars! So in order to decide which |
| about our country's GDP. | | | | combination would have produced a greater GDP, we |
| Sure- I know what GDP is; it stands for gross | | | | would have to attach a price tag to each of the |
| domestic product! And that means... ? | | | | products considered. Understand that GDP is a |
| Our economy's primary measure of performance is its | | | | monetary measure. |
| annual output of goods and services; in other words, | | | | One more quick point- to measure aggregate output |
| we're talking about our nation's GDP. If you take the | | | | accurately, all goods produced in a year must be |
| aggregate output of what our nation produces and put | | | | counted only once! The problem is that most products |
| a price tag on it, you get gross domestic product. So, in | | | | go through several stages of production where |
| short, it's a number expressed in dollars as to how | | | | various components are sold several times. GDP |
| much product and service our economy produces. | | | | ONLY considers the market value of final goods, not |
| This number includes all goods and services produced | | | | all of the products sold on an intermediate level. So, if |
| by either citizen-supplied or foreign-supplied resources | | | | you produce a portion of a product and sell it to a |
| that are employed within the US. So that means if you | | | | manufacturing company, you're producing an |
| have Honda (a Japanese company) based in Ohio | | | | intermediate product that won't be considered in GDP. |
| selling cars, the total output expressed in a dollar value | | | | Now- next time you open up the New York Times or |
| will fall under the United States' GDP. | | | | The Economist, you'll understand exactly what GDP is |
| Here's a question: let's assume that an economy | | | | and how it is calculated! |
| produces 2 books and 1 blanket one year, and 1 book | | | | |