Beruflich Dokumente
Kultur Dokumente
4/27/15
1 of 37
2 of 37
4/27/15
3 of 37
GDP Includes Only Current Production GDP includes only production that
takes place during the indicated time period.
2013 Pearson Education, Inc. Publishing as Prentice Hall
4 of 37
4/27/15
(1)
Product
(3)
Price per
Unit
(2)
Quantity
Eye examinations
100
$50.00
Pizzas
80
10.00
Textbooks
20
100.00
2,000
0.10
Paper
5 of 37
(1)
Product
Eye examinations
(1)
Quantity
Eye examinations
100
$50.00
Pizzas
80
10.00
Textbooks
20
100.00
2,000
0.10
Paper
Product
(3)
Price per
Unit
(2)
Quantity
(2)
Price per Unit
(3)
Value
100
$50
Pizzas
80
10
$5,000
800
Textbooks
20
100
2,000
Step 4: Add the value for each of the three final goods and services to find GDP.
For more practice, do related problem 1.10 at the end of this chapter.
6 of 37
4/27/15
7 of 37
8 of 37
4/27/15
Components of GDP
The BEA divides its statistics on GDP into four major categories of expenditures:
Consumption
Investment
Government purchases
Net exports
Economists use these categories to understand why GDP fluctuates and to
forecast future GDP.
9 of 37
Test your understanding by doing related problem 1.11 at the end of this chapter.
10 of 37
4/27/15
Y = C + I + G + NX
The equation tells us that GDP (denoted as Y) equals consumption (C) plus
investment (I) plus government purchases (G) plus net exports (NX).
2013 Pearson Education, Inc. Publishing as Prentice Hall
11 of 37
Consumption accounts for 70.5 percent of GDP, far more than any of the other components.
In recent years, net exports typically have been negative, which reduces GDP.
Note that the subtotals may not sum to the totals for each category because of rounding.
2013 Pearson Education, Inc. Publishing as Prentice Hall
12 of 37
4/27/15
The table in Figure 8.2 provides a more detailed breakdown of the components
of GDP and shows several interesting points:
Consumer spending on services is greater than the sum of spending on
durable and nondurable goods.
Business fixed investment is the largest component of investment.
Purchases made by state and local governments are greater than purchases
made by the federal government.
Imports are greater than exports, so net exports are negative.
13 of 37
Connection
Consumption is a larger fraction
of GDP in the United States than
in most other high-income
countries or in rapidly growing
countries such as China and India.
Over time, consumption in the
United States has increased as a
fraction of GDP.
Test your understanding by doing related problem 1.12 at the end of this chapter.
14 of 37
4/27/15
Value of Product
Value Added
Cotton farmer
Textile mill
Shirt company
12
L.L.Bean
20
= $35
The price of the shirt on L.L.Beans Web site is exactly equal to the sum of the
value added by each firm involved in the production of the shirt.
2013 Pearson Education, Inc. Publishing as Prentice Hall
15 of 37
16 of 37
4/27/15
When the BEA calculates GDP, it does not include two types of production:
Production in the home
Production in the underground economy
17 of 37
Making
the
Connection
In developing countries,
the underground economy is often
referred to as the informal sector,
as opposed to the formal sector,
in which output of goods and
services is measured.
Although it might not seem to matter
whether production of goods and
services is measured and included
in GDP or unmeasured, a large
informal sector can be a sign of
government policies that are
retarding economic growth.
Test your understanding by doing related problem 2.8 at the end of this chapter.
18 of 37
4/27/15
The Value of Leisure Is Not Included in GDP If Americans still worked 60hour weeks as they typically did in 1890, GDP would be much higher than it is,
but the well-being of the typical person would be lower because less time would
be available for leisure activities.
GDP Is Not Adjusted for Changes in Crime and Other Social Problems
An increase in crime reduces well-being but may actually increase GDP if it
leads to greater spending on police, security guards, and alarm systems.
GDP Measures the Size of the Pie but Not How the Pie Is Divided Up
GDP may not provide good information about the goods and services
consumed by the typical person.
2013 Pearson Education, Inc. Publishing as Prentice Hall
Making
the
19 of 37
Connection
Test your understanding by doing related problem 2.10 at the end of this chapter.
20 of 37
10
4/27/15
21 of 37
22 of 37
11
4/27/15
2013
Quantity
Price
Quantity
Price
Eye
examinations
80
$40
100
$50
Pizzas
90
11
80
10
Textbooks
15
90
20
100
Product
Eye examinations
100
2005 Price
$40
Value
$4,000
Pizzas
80
11
880
Textbooks
20
90
1,800
Step 3: Add up the values for the three products to find real GDP.
Real GDP for 2013 equals the sum of:
For more practice, do related problem 3.4 at the end of this chapter.
24 of 37
12
4/27/15
Currently, the
base year for
calculating GDP
is 2005.
In the years before
2005, prices were,
on average, lower
than in 2005, so
nominal GDP was
lower than real GDP.
In 2005, nominal and
real GDP were equal.
Since 2005, prices
have been, on
average, higher than
in 2005, so nominal
GDP is higher than
real GDP.
25 of 37
Price level A measure of the average prices of goods and services in the
economy.
GDP deflator A measure of the price level, calculated by dividing nominal GDP
by real GDP and multiplying by 100.
GDP deflator =
Nominal GDP
100
Real GDP
Nominal GDP is equal to real GDP in the base year, so the value of the GDP
price deflator will always be 100 in the base year.
26 of 37
13
4/27/15
The following table gives the values for nominal and real GDP for 2009 and 2010:
2009
2010
Nominal GDP
$13,939 billion
$14,527 billion
Real GDP
$12,703 billion
$13,088 billion
We can use the information from this table to calculate values for the GDP price
deflator for 2009 and 2010:
Formula
Applied to 2009
Applied to 2010
$13,939 billion
$14,527 billion
Nominal GDP
GDP
100 = 110
100 = 111
Deflator = Real GDP 100 $12,703 billion
$13,088 billion
From these values for the deflator, we can calculate that the price level
increased by 0.9 percent between 2009 and 2010:
111 110
100 = 0.9%
110
2013 Pearson Education, Inc. Publishing as Prentice Hall
27 of 37
28 of 37
14
4/27/15
National income accounting refers to the methods the BEA uses to track total
production and total income in the economy. The statistical tables containing this
information are called the National Income and Product Accounts (NIPA) tables.
National Income
National income is calculated as GDP minus the consumption of fixed capital,
or depreciation.
Personal Income
Personal income is income received by households.
To calculate personal income, we subtract the earnings that corporations retain
rather than pay to shareholders in the form of dividends.
We also add in the payments received by households from the government in
the form of transfer payments or interest on government bonds.
2013 Pearson Education, Inc. Publishing as Prentice Hall
29 of 37
30 of 37
15
4/27/15
31 of 37
32 of 37
16