Gross Domestic Product (GDP)

 … a core concept in The Study of Macroeconomics

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Concept description

GDP is the market value of all finished goods and services produced within a country in a year. (See Alex Tabarrok, reference below and video to right.)

Tabarrok emphasizes the following points from this definition.

  • A finished good is something that is not sold again as part of some other good.
  • A capital good can be used to make other goods, but it will not be sold again as part of another good, so it is classified as a finished good.
  • A good imported from another country is not included in the GDP, but a good exported to another country is.
  • If a good (e.g., polar bears) is not bought or sold in a market then it is not included in the GDP because there is no agreed way to assess its value.
MRU practice questions

See http://www.mruniversity.com/node/329125?utm_source=MacroAnnot&utm_medium=PQAnnot&utm_campaign=MRUYTAnnotation.

  1. GDP includes

Source

Tyler Cowen, What is Goss Domestic Product (GDP)?, Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-macroeconomics, accessed 20 April 2016.

Atlas topic and subject

The Study of Macroeconomics (core topic) in Macroeconomic Policy.

Page created by: Ian Clark, last modified on 20 April 2016.

Image: Tyler Cowen, What is Goss Domestic Product (GDP)?, Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-macroeconomics, accessed 20 April 2016.