1. Do Now - GDP
Why, do you think, it is important for individuals, businesses, and countries to track what they produce over the course of a year?
What are some ways individuals add value to the economy and the society?

2. Measuring The Nation’s Output 13-1, P.P. 340-348
MAIN IDEA: GROSS DOMESTIC PRODUCT (GDP) IS AN IMPORTANT MEASURES OF ECONOMIC PERFORMANCE

3. Gross Domestic Product
GDP - The dollar value of all final goods and services produced in a country’s borders in a year.
Gross – Total
Domestic – In the Country
Product – Final Goods and Services
National Income Accounting – the measurement tools that keep track of production, consumption, saving and investment.
A way track overall economic performance

4. GDP Break Down
GDP - The dollar value of all final goods and services produced within a country’s borders in a year.
Dollar Value – it will be reported in dollars
Final Goods and Services – the end product
Not Intermediate Goods (avoids double counting)
Within a countries borders (the Domestic part of GDP)
Toyota plant in San Antonio, yes/no?
Ford Plant in Sweden, yes/no?

5. Excluded From GDP Measurement
Intermediate Products - So they aren’t counted twice.
Secondhand Sales and other transfers of wealth/property
Non-market Transactions
Example: Mowing your yard
Underground Economy: not reported (gambling, drugs, etc.)

6. Output Expenditure Model
GDP = C + I + G + Xn
C = Consumer Sector
Consumer spending on final goods and services
I = Investment Sector
Investment spending by businesses on Capital Goods
Plants (factories), offices, equipment, inventories, etc…

7. Output Expenditure Model
GDP = C + I + G + Xn
G = Government Spending
National defense, interest on the debt, health care, roads, and education
Not included are transfer payments (Social Security and Medicare), why?
Xn = (X-M) = Exports (X) – Imports (M)
Exports add to GDP (follow the money)
Imports subtract from GDP (follow the money)