21st October 2019

lumenlearning
11

What is GDP and how is it calculated?

The following equation is used to calculate the GDP: GDP = C + I + G + (X – M) or GDP = private consumption + gross investment + government investment + government spending + (exportsimports). Nominal value changes due to shifts in quantity and price.

Also asked, what is GDP in economic?

Gross Domestic Product (GDP) is the broadest quantitative measure of a nation's total economic activity. More specifically, GDP represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period of time.

What are some examples of GDP?

The Gross Domestic Product measures the value of economic activity within a country. Strictly defined, GDP is the sum of the market values, or prices, of all final goods and services produced in an economy during a period of time. GDP is a number that expresses the worth of the output of a country in local currency.

What happens if the GDP is high?

An increase in GDP will raise the demand for money because people will need more money to make the transactions necessary to purchase the new GDP. Thus, an increase in real GDP (i.e., economic growth) will cause an increase in average interest rates in an economy.
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