Gross Domestic Product Homework Help

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Introduction to Gross Domestic Product:

As everyone knows there are goods and services that are manufactured in an economy. The value of these services and goods is known as GDP. GDP gives a picture of the standard of living of the country. However it should not be confused with per capita income of the economy. GDP and income is not related. Implication of GDP The Gross Domestic Product is all about production and the production which is also consumed entirely. It serves on the assumption that the goods that are produced and consumed there and there itself. Derivation of GDP There is a derivation by which GDP is calculated. It is the most crucial derivation and is also known as the Product Approach by which the GDP of any country can be calculated. The derivation of GDP by Product Approach is:

  • GDP = C + I + G + (X – M)
  • GDP is Gross Domestic Product
  • C is Consumption
  • I is Gross Investment
  • G is Government Spending
  • X is Exports
  • M is Imports

Apart from the Product approach there are two more ways known as the Income Approach and Expenditure Approach. Analysis of GDP The GDP which is calculated should be always a surplus one. A high level of GDP shows that the standard of living of the economy. An improving GDP means that the standard of living of the economy is improving. Thus the government should always try to improve and upgrade the GDP.

  • Gross domestic product: 16.77 trillion USD (2013) World Bank
  • GDP per capita: 53,041.98 USD (2013) World Bank
  • Unemployment rate: 4.9% (Jun 2016)
  • Minimum wage: 7.25 USD per hour (Jul 2015)
  • Currency: United States Dollar
  • GDP growth rate: 2.2% annual change (2013) World Bank
  • Agriculture contributes around 5.7-percent
  • Gross national income: 16.99 trillion PPP dollars (2013) World Bank
  • Industry contributes around 5.7-percent
  • Health care and social assistance contributes around 4.7 percent
  • Professional, scientific, and technical services contributes around 3.7 percent