Measuring the U.S. Economy
A Macroeconomic study
Measuring the Economy
 Why is the Economy constantly studied and measured?
 How might an Economist study the economy? What factors
would they look at to determine the economy’s progress?
Measuring the Economy
 National Income Accounting – measurement of the
national economy’s performance; dealing with the output and
income of the economy
Five Statistics that measure the national Economy
1. Gross Domestic Product
2. Net Domestic Product
3. National Income
4. Personal Income
5. Disposable Personal Income
Gross Domestic Product
 GDP – total dollar value of
all final goods and services
produced in a nation in a
single year.
 How might GDP be
calculated? What do
economists measure?
 How does U.S. compare
to the rest of the world?
GDP (current US$)
$14.99 trillion 2011
Population, total
311.6 million
GDP per Capita
48,112
GDP PER CAPITA
Measuring GDP
Four Categories of Calculating GDP
1. Consumer Sector (goods and service bought
by consumers)
2. Investment Sector (purchases of goods used
to produce consumers goods)
3. Government Sector (purchases of federal,
state, and local gov.)
4. Net Exports (diff. between exports and
imports)
 Is GDP an accurate measurement of the
U.S. economy?
Net Domestic Product
 NDP- GDP minus the total
value lost through
depreciation on
equipment.
 Depreciation: loss of value
because of wear and tear to
durable goods and capital
goods.
National Income
 NI- total income earned by
everyone in the economy.
 Sum of all incomes
including….
 Wages and salaries
 Income of self-employed
 Rental income
 Corporate profits
 Interest on saving and
investments
Personal Income and
Disposable Personal Income
 PI- total income that individuals receive before personal
taxes are paid.
 DPI- income remaining before people to spend or save after
all taxes have been paid