Assignment 2: What Is Gross Domestic Product?

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Assignment 2: What is Gross Domestic Product?

Based on the information contained on the website above, answer the following questions: 1. What was Real GDP for 2009? The Real GDP for 2009 was 13,973.7 a. What does GDP tell us? The GDP gives information regarding the country’s economy in regards to total money value on all final goods and services that are produced in the economy over any given time frame - annually or quarterly.
Real GDP accounts for price changes especially with inflation whereas nominal GDP does not. b. How did GDP change from 2008? In the first and second quarter, GDP increased. In the third quarter, GDP started decreasing slightly. However, export and imports of goods and services increased slightly. In the fourth quarter, real GDP decreased. Exports, imports, and personal consumption expenditures decreased. Additionally, Federal, national defense and nondefense increased through each quarter. c. What caused these changes? The causes for these changes were because of the recession. This was due to a significant decline in economic activity. Additionally, personal consumption expenditures and private investment are down dramatically and real exports of goods and services and real exports of goods and services decreased. Furthermore, government spending has increased. 2. What was GNP for 2009? The GNP for 2009 was 14,117.2. d. What is the difference between GDP and GNP? GDP (Gross Domestic Product) is the total market value of all goods and services that are produced within the United States borders. GNP (Gross National Product) is the total market value of goods and services produced by labor and property owned by a country regardless of where production took place. e. How did GNP change from 2008? GNP increased throughout 2008 but started decreasing in 2009. Private, domestic business, and…...

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