GDP

A. What Is GDP? GDP is an abbreviation for Gross Domestic Product
Gross Domestic Product- the total market value of all final goods and services that is produced within a country's borders in a given year
B. What is GNP? GNP is an abbreviation for Gross National Product
Gross National Product- the total market value of all final goods and services by citizens of that country on its land or any other foreign lands.
C. What's Included in GDP?
   (65%)  C- Personal Consumption Expenditures
    (17%) Ig- Gross Private Domestic Investment
              Such as factory equipment, factory equipment maintenance, construction of housing, unsold inventory of products built in a year.
     (20%) G- Government Spending
     (-2%) Xn- Net Exports (Exports minus Imports)
D. What IS NOT included in GDP?
1. Intermediate Goods- goods that require further processing before they are ready for final use
2. Used or Secondhand Goods- not counted to avoid double counting
3. Purely Finacial Transactions- (stocks and bonds) not counted because it's not a good or service
4. Illegal Activities
5. Unreported Business Activity- (unreported tips)
6. Transfer Payments
  a. Public Payments (Social Security, Veterans, Welfare)
  b. Private Payments (Scholarship)
7. Non- market Activity (work you perform for yourself, babysitting for parents, etc.)