28 January 2016

• Gross Domestic Product (GDP)- total market value of all final goods and services produced within a countries border in given year.

• Gross national Product (GNP)- total market value of all final goods and services by citizens of that country on its land or foreign land.

• INCLUDED IN GDP
• C- Personal consumption expenditures (Your own Money, Wages, Income).
• IG- Gross private domestic investment  
• Factory equipment maintenance 
• New factory equipment
• Construction of housing
• Unsold inventory of products built in a year before
• G- Government spending
• Xn- Exports- Imports

• NOT INCLUDED IN GDP
• Intermediate Goods
    -Goods that require further processing, before ready for final use
     (car, all needs for a car such as window, gas tank, engine)
•   used/ second                                                                                                                         -avoid double counting (thrift shop clothes)
•  Purely Financial Transaction                                                                                                 - such as stocks and bonds

   - does not involve the product of goods and services. It is mainly a transient of assets.

  -something that is durable
• Illegal Activity -(drug)
• Unreported Business Activities (unreported tips)
•  Transfer Payments -private (scholarships)   -Public ( social security checks, welfare)
• Non- Market Activity -(volunteering, baby sitting, performing work for your self such as fixing the roof on your own home)