You’ve been watching the financial news and you’ve heard that the U.S. reports its GDP has risen in the fourth quarter. You have some vague idea that this means something about the economy but aren’t quite sure what it is. So what is the GDP?
GDP is an acronym that stands for Gross Domestic Product. It is a figure that represents the monetary value of all end-use goods and services produced within a country for a period of time. So when you hear that the GDP is up for the fourth quarter that simply means that more goods or services were produced in this period. It is generally used as a way to take the pulse of the overall economy as a whole.
How is it calculated? The short answer is by the following formula:
GDP = C + I + G + (X-M)
Where:
C = Consumption
Stuff we buy. These are sometimes reported as sub-categories: durable goods, non-durable goods, and services.
I = Investment
No, this isn’t your 401(k). It is the total of business investment, i.e. when IBM builds a new plant or the Apple store adds to its inventory. It also includes the purchase of new-construction homes by private households.
G = Government spending
Everything from the building of the interstate highways to the purchase of M1A2 Abrams tanks that the government spends. These figures do not include so-called transfer payments such as social security or veterans’ benefits.
(X-M) = Total Exports less Total Imports (aka Net Exports)
Self-explanatory.
GDP is often used to measure a country’s economic health. When it is taken into context with the population of the country it is known as GDP per capita. GDP per capita is calculated as GDP / population, and is often used as an informal gauge of standard of living within a country.
Nominal GDP is GDP evaluated at current market prices. Therefore , nominal GDP wil include of the changes in market prices that have occurred during the current year due to inflation or deflation. Nominal GDP= GDP deflator.real GDP/100 Real GDP is GDP evaluate at the market price of some base year. GDP deflator --- Using the statistics on real GDP and nominal GDP, one can calculate an implecit index of the price level for the year. This index is called GDP deflator. GDP deflator = nominal GDP/real GDP .100 The GDP deflator can be viewed as a conversion factor that transform real GDP into nominal GDP. Note that in the base year, real GDP is by definition equal to nominal GDP so that the GDP deflator in the base year equal to 100.
TOP ELEVEN COUNTRIES IN SOUTH EAST ASIA BY GDP(GROSS DOMESTIC PRODUCT ) East Timor (GDP 499 ) Laos (GDP 5,260 ) Cambodia (GDP 11,182 ) Myanmar (GDP 27,182 ) Vietnam (GDP 89,829 ) Philippine (GDP 168,580 ) Hong kong (GDP 215,559 ) Malaysia (GDP 222,219 ) Thailand (GDP 273,248) Taiwan (GDP 392,552 ) Indonesia (GDP 511,765)
Real GDP is the GDP during your chosen base year, and nominal GDP is the GDP of the year on which you are focusing. The GDP deflator from 1990 to now (2013) is: GDP (2013)/ GDP (1990) * 100%
Potential GDP is the total numerical value of GDP before inflation is counted in. Real GDP is nominal GDP adjusted for inflation
the GDP would be overstated
Nominal GDP is GDP evaluated at current market prices. Therefore , nominal GDP wil include of the changes in market prices that have occurred during the current year due to inflation or deflation. Nominal GDP= GDP deflator.real GDP/100 Real GDP is GDP evaluate at the market price of some base year. GDP deflator --- Using the statistics on real GDP and nominal GDP, one can calculate an implecit index of the price level for the year. This index is called GDP deflator. GDP deflator = nominal GDP/real GDP .100 The GDP deflator can be viewed as a conversion factor that transform real GDP into nominal GDP. Note that in the base year, real GDP is by definition equal to nominal GDP so that the GDP deflator in the base year equal to 100.
TOP ELEVEN COUNTRIES IN SOUTH EAST ASIA BY GDP(GROSS DOMESTIC PRODUCT ) East Timor (GDP 499 ) Laos (GDP 5,260 ) Cambodia (GDP 11,182 ) Myanmar (GDP 27,182 ) Vietnam (GDP 89,829 ) Philippine (GDP 168,580 ) Hong kong (GDP 215,559 ) Malaysia (GDP 222,219 ) Thailand (GDP 273,248) Taiwan (GDP 392,552 ) Indonesia (GDP 511,765)
Real GDP is the GDP during your chosen base year, and nominal GDP is the GDP of the year on which you are focusing. The GDP deflator from 1990 to now (2013) is: GDP (2013)/ GDP (1990) * 100%
Potential GDP is the total numerical value of GDP before inflation is counted in. Real GDP is nominal GDP adjusted for inflation
It is 100*(New GDP - Old GDP)/Old GDP
[ (GDP 2006 - GDP 2005) / GDP 2005] X 100 ---- ----
the GDP would be overstated
The GDP deflator is calculated using the formula: GDP Deflator = (Nominal GDP / Real GDP) x 100. Given that nominal GDP is 7,920.3 million and real GDP is 8.1 million, the calculation would be: (7,920.3 / 8.1) x 100 = 97,407.41. Therefore, the GDP deflator is approximately 97,407.41.
GDP Deflator = Nominal GDP/Real GDP x 100.
nominal GDP and real GDP.
The formula for calculating GDP growth rate is: (GDP in current year - GDP in previous year) / GDP in previous year x 100% Here's an example: Suppose the GDP of a country was $1 trillion in 2020 and it increased to $1.2 trillion in 2021. To calculate the GDP growth rate for 2021, we can use the formula above: ($1.2 trillion - $1 trillion) / $1 trillion x 100% = 20% Therefore, the GDP growth rate for 2021 is 20%. This means that the country's economy grew by 20% from 2020 to 2021.
the GDP is 8,402