Definitions :
GDP(gross
domestic product)
It is the total
market value of all final goods and services. Produced within a country’s
borders in a given year.
GNP
(gross national product)
It is the total
market value of all final goods and services by citizens of that country on its
land or foreign land.
What
is included in GDP?
c- personal consumption expenditures. (65%)
Ig- gross private domestic.(17%)
-factory equipment maintenance.
-new factor equipment
-construction of housing.
-unsold inventory of products built in a year.
G- Government spending (20%).
XN- net exports (exports – imports).(-20%)
What’s not included
1.
Intermediate goods- goods that require further processing
before they are ready for final use.(backpack strap)
2.
Used or
second hand goods.
-avoid double counting.
3. Purely financial
transaction: such as stocks
and bonds.
-does not involve the production of a good or
service. It is merely a transfer of assets. (it is not durable).
4. Illegal activity
(drugs).
5. Unreported
business activities.
(Unreported tips)
6. Transfer payments. (Money coming from government).
-public (social security, welfare)
-private (scholarship)
7. None market
activity:
-volunteering.
-Baby sitting.
-
performing work for one self. (Fixing the roof of one’s house)
No comments:
Post a Comment