Bellringer1. If you went to the doctor, what would the doctor

test to see if you were healthy? List as many ways as you can think of.

Macroeconomic indicatorsBrainstorm from the news

• Gross Domestic Product• Unemployment Rate• Inflation rate• Median income• Housing starts• Currency comparisons• Stock market• Bank holdings• Life expectancy• Population• Leisure time

Gross Domestic Product• A measure of a final goods of country’s economy in

during a given time (year, month, quarter)• Invented by economist Simon Kuznets in 1937

Top World Economies

Economist handout

Parts of GDP• All consumer spending on

new items within a country in a certain year, month or quarter

• All private investment within a country in a certain year, month or quarter

• IOW: $$$ business spends• Where do they get it from?

Parts of GDP

Parts of GDP• All government

spending in a country in a certain year, month or quarter

• Examples: education, military, roads, healthcare, etc

Parts of GDP

• All net exports from a country in a certain year, month or quarter

• Exports = goods shipped to other countries

• Imports = goods brought into a country from another country

Net Exporters

• A country or territory whose value of exported goods is higher than its value of imported goods over a given period of time.

• A net exporter is the opposite of a net importer.

Net Importers

US GDP history by part

GDP

• What economic activity did I leave out?

• 2 ways GDP might be misleading?

GDP Calculation

Y = C + I + G + E

where Y = GDP C = Consumer Spending I = Investment E = Exports - Imports G = Government Spending

United States GDP 2003

Y = C + I + E + G$$ in BillionsConsumer Spending = $7605Investment = $1606Exports = $1021Imports = $1508Government Spending = $2017$7605 + 1606 + (1021-1508) + 2017 = $10,741 (2003)