UNIT 2: GDP 1/26/16

GDP - the market value of all final goods and services, produced within a nation in a given year.

Not included in GDP: 

• Used or 2nd hand goods
• Purely financial transactions (stocks and bonds)
• Unreported business activity
• Illegal activity
• Non-market activity (volunteering)
• Transfer payments (public: SS welfare, private: scholarships)
• Intermediate goods (raw materials used to make final product) 

1/28/16

GDP is generally composed of 65% personal consumer expenditures, 17% gross private domestic investments(which includes new factory equipment/maintenance ), 20% government purchases, and -2 % net exports (Exports - Imports)

Also circular flow:

Resources sell resources(factors of production)  and buy products in the Factor market.
Firms sell products and buy resources in the Product market.'