GDP

GROSS DOMESTIC PRODUCT (GDP)= total market value of all final goods and services produced within a country's border within a given year.

GROSS DOMESTIC PRODUCT (GNP)= measure of what its citizens produce and whether they produce these items within these borders.

Whats INCLUDED in GDP 

C= Personal Consumption Expendentures (67%)
consumption is finished goods or services

Ig=Gross Private Domestic Investment (17%)
1.Factory Equipment Maintenance
2. New factory equipment
3. Construction of Housing
4. Unsold inventories or products built in a year

G= Government Purchases of goods and services (20%)
(schoolbuses)
Xn= Net exports (Exports- Imports) (-4%)


 C + Ig + G +Xn = GDP


What's NOT INCLUDED in GDP

1. Used or secondhand goods

2. Gifts or Transfer Payments (No output, no production)
                  ↙                     ↘
             Private              Public
        (Scholarship)       (Social Security/Welfare)

3. Stocks or bonds (no production, only financial transaction)

4. unreported business activities (tips)

5. Illegal activities or (underground activities)
-blackmarket

6. non-market activities
-babysitting
-bartering +trading

7. Intermediate goods
-tires, wheel parts of a car

GDP formulas:

Expenditure Approach

C+Ig+G+Xn=GDP

Income Approach

Wages+ Rent + Interest + Profits+Statistical adjustments= GDP

Trade = (Exports - Imports)

Positive # = Surplus

Negative # = Deficit

Budget = (Government purchases + transfer payments - government tax + fee collection)

Positive #= deficit

Negative # = surplus

National Income:

method 1

(Compensation of employees + renters income + proprietors income + interest income + corporate income)

method 2 

GDP - indirect business taxes - net foreign factor payment - depreciation

Disposable Personal Income (DPI)

(National income - personal household taxes + government transfer payment)

(Depreciation is the SAME as Consumption of fixed capital )

GNP = GDP + nation foreign factor payment

NNP = GNP - depreciation

NDP= GDP - Depreciation

Gross Private Investment (Ig)= NDPI (net domestic private investment) + Depreciation