Gross Domestic Product and Gross National Product

• Gross domestic product - Total dollar value of all final goods and services produced within a country’s borders within a given year 
• Gross national product- total value of all final goods and services produced by Americans’ in a year 
• GDP Equation
• =C + Ig+ G + Xn (Included) 
• Gross Domestic Product 
• (C) Consumption  
• 67% to the economy  
• Purchasing finish goods and services 
• Last state 
• (Ig) Gross Private Domestic Investment 
• Factory equipment maintenance 
• New factory equipment  
• New construction housing  
• Unsold inventory of products built in a year 
• (G) Government spending 
• Ex. Military, ft bend 300 new teachers 
• (Xn) Net exports 
• =Exports-imports 
• Excluded in GDP

1. Used or second hand goods
2. Intermediate goods- Goods and services that are purchased for resale or for further processing or manufacturing
3. Non-market activity
1. Illegal Drug
2. Unpaid Work
3. Own repair jobs
4. Prostitution
5. Baby Sitting
6. Growing own vegetables for personal consumption
4. Financial transactions
1. Stocks
2. Bonds
3. Real estate

5.     Gifts or Transferred Payment

a.     Private- produces no output, simply travels funds from one private individual to another

b.     Public- It contribute nothing to the current output or production

                                               i.     Ex. Welfare, Social Security