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FX Street
Jan 21
Comment
Quote: ‘Any sufficiently advanced technology is indistinguishable from magic.’ Sir Arthur C. Clarke...
For more information, read our latest forex news and reports.
New York Times
Jan 20
Comment
U.S. antitrust regulators have lowered the dollar value of mergers that must be reported to the government to $63.4 million from $65.2 million, the Federal Trade Commission said on Tuesday.
Bloomberg
Jan 19
Comment
The Czech Republic needs to reduce
its budget deficit by 1 percent of gross domestic product each
year to meet European Union requirements and adopt the euro,
said Deputy Finance Minister Bohdan Hejduk.
Skeptical CPA
Jan 17
Comment
"Corporations raise money by issuing both debt and equity, the latter giving investors an implicit share in future profits. Governments should do something like this, too, and not just rely on debt. Borrowing a concept from corporate finance,...
MarketWatch
Jan 15
Comment
J.P. Morgan revised up its forecast for U.S. economic growth in the fourth quarter , citing companies' speed at replenishing inventory they cut back on during the economy's slowdown. Consumer spending also appears to be rising faster than they...
Bloomberg
Jan 14
Comment
(Update1) The earthquake in Haiti will cost
the nation’s economy at least 15 percent of its gross domestic
product, said Pamela Cox, the World Bank’s vice president for
Latin America and the Caribbean.
FX Street
Jan 14
Comment
All this and more is available on our video blog Sterling is once again higher this morning after a...
For more information, read our latest forex news and reports.
George Washington's Blog
Jan 12
Comment
Ambrose-Evans Pritchard notes:
Fitch expects the combined state and federal debt to reach 94pc of GDP next year, up from 57pc at the end of 2007. Federal interest costs will reach 13pc of revenues, meaning that an eighth of all taxes will...
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more ▼WIKI ANALYSIS
WIKI ANALYSIS| This article is part of WikiProject Definitions. Consider editing to improve it. View articles referencing this definition. |
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This article is about Gross Domestic Product. For the article on the company with ticker GDP, see Goodrich Petroleum (GDP). For articles about country GDPs see GDP (Disambiguation)
A country's Gross Domestic Product is the total value of the goods and services it produces in one year. GDP is used as a measurement of the size of a country's economy, and GDP growth is used as a measurement of economic growth - for example, in the US, two consecutive quarters of negative GDP growth is the official definition of a recession.
GDP = C + I + G + NX,
Where:
- C = Consumer Spending
- I = Business Expenses and Spending
- G = Government Spending
- NX = Net Exports
Components of GDP:-
- C (Consumption): It is the Private Consumption in the economy. This includes most personal expenditures of households such as food, rent, medical expenses and so on but does not include new housing.
- I (Investment Spending):- These are investments by business or households in capital. Examples of investment by a business include construction of a new mine, purchase of software, or purchase of machinery and equipment for a factory. Spending by households (not government) on new houses is also included in Investment. In contrast to its colloquial meaning, 'Investment' in GDP does not mean purchases of financial products. Buying financial products is classed as 'saving', as opposed to investment. The distinction is (in theory) clear: if money is converted into goods or services, it is investment; but, if you buy a bond or a share of stock, this transfer payment is excluded from the GDP sum. That is because the stocks and bonds affect the financial capital which in turn affects the production and sales which in turn affects the investments. So stocks and bonds indirectly affect the GDP. Although such purchases would be called investments in normal speech, from the total-economy point of view, this is simply swapping of deeds, and not part of real production or the GDP formula.
- G (Government Spending):- This is the sum of government expenditures on final goods and services. It includes salaries of government employees, defense expenditure like purchase of weapons and any investment expenditure by the government. It does not include any transfer payments, such as social security or unemployment benefits.
- NX (Net Exports):- This is actually bifurcated into Gross Exports (X) and Gross Imports (M). Gross Exports - GDP captures the amount a country produces, including goods and services produced for other nations' consumption, therefore exports are added.
Gross Imports - Imports are subtracted since imported goods will be included in the terms G, I, or C, and must be deducted to avoid counting foreign supply as domestic.
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