Module 03 Written Assignment - GDP and Growth
According to (McEachern, 2012) to calculate Gross Domestic Product (GDP) by the following four main categories: 1. Consumer Consumption – household purchases of final goods and services. 2. Gross Investment – purchase of new plants, equipment, buildings, residences and net worth of inventories. 3. Government Spending – the value of consumption and gross investment of goods and services. 4. Net Exports – value of U.S. exports of goods and services minus the value of U.S imports of goods and services. According to The World Bank website, the 2012 GDP dollars for the United States, China, India, and Turkey are shown in the graph below. This chart shows that the US ranks the highest of the four countries in GDP spending and Turkey ranks the lowest. It is not surprising that China ranks second to the U.S. Many items that the U.S. consumer uses and purchases are produced by China and purchased by the U.S. consumer every day.
Data obtained from the Bureau of Economic Analysis website, representing forty years (1971 to 2011) of the U.S. GDP spending are represented in charts below. Consumer Consumption
These charts show that U.S. consumption and government spending has increased. U.S. Net Exports fallen so we are relying on borrowing. From my perspective, that is going to be an issue in the long-term as our country currently no longer makes much of anything. Most of our spending is a result of products produced and imported into U.S. by China. References
McEachern, W. A. (2012). Macro Econ. Mason, OH: South-Western. References
GDP (current US$). (2013). Retrieved from The World Bank: http://data.worldbank.org/indicator/NY.GDP.MKTP.CD
National Income and Product Accounts Tables. (2013). Retrieved from Bureau of Economic Analysis: http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1/
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