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• STANDARD: SSMA1A-E
• GOALS: I WILL BE ABLE TO DEFINE GDP AND DESCRIBE
HOW GDP CAN INDICATE UPS AND DOWNS IN THE
BUSINESS CYCLE.
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• GDP ADJUSTED FOR INFLATION
• THE TOTAL MARKET VALUE OF
ALL FINAL GOODS & SERVICES.
• TOTAL MARKET VALUE IN CURRENT
PRICES, OF ALL FINAL GOODS &
SERVICES PRODUCED IN A NATION
DURING A GIVEN PERIOD OF
TIME…USUALLY 1 YEAR
• NOMINAL GDP IS THE MARKET
VALUE IN TODAY’S PRICES. REAL
GDP IS MEASURED IN TERMS OF A
BASE YEAR PRICES, WHICH ALLOWS
US TO COMPARE GDP FOR MULTIPLE
YEARS FOR OUTPUT RATHER THAN
CHANGES IN PRICE.
• A GROWING ECONOMY MEANS
MORE GOODS & SERVICES ARE
PRODUCED FOR ITS CITIZENS.
• GDP MEASURES ECONOMIC
ACTIVITY—THE AMOUNT OF GOODS
& SERVICES PRODUCED IN AN
ECONOMY.
• KUZNETS IS SUGGESTING THAT OTHER
THINGS, BEYOND GDP, CONTRIBUTE
TO THE WELL-BEING OF SOCIETY.
• CHILDREN’S JOY IN PLAYING,
BEAUTY OF POETRY, THE STRENGTH
OF MARRIAGES, THE INTELLIGENCE
OF PUBLIC DEBATE, THE INTEGRITY OF
PUBLIC OFFICIALS, THE HEALTH OF
CHILDREN, AND THE QUALITY OF
EDUCATION
• ACTIVITIES OUTSIDE THE
MARKET…MOWING YOUR OWN
LAWN, EXTERNALITIES, ILLEGAL
ACTIVITIES IN UNDERGROUND
ECONOMY