Since 1985, when the State Council of China approved to establish a System of National Accounting (SNA), using the gross domestic product (GDP) to measure the national economy, more and more people are getting familiar to this word. We must have heard about it for countless times. At the end of 2010, China has overtaken Japan as the world's second biggest economy in terms of GDP, which has drawn attention all around the world and has made Chinese people proud of the rapid development over the past decade. However, there are still a large quantity of people in China or even in the world that know nothing about GDP. Moreover, still many people do not fully understand the real meaning of GDP even they have heard about this economic term before. GDP per capita is often considered an indicator of a country's standard of living whereas there are limitations and criticisms against the belief that GDP measures a country’s living standard. Many economists (for example, who? Add sources) argue that GDP is an empty abstraction devoid of any link to the real world, and, therefore, has little or no value in economic analysis. Many environmentalists (for example, who? Add sources) argue that GDP is a poor measure of social progress because it does not take harm to the environment into account. Thus, it is important to find out the real meaning of GDP and its value to economic analysis. II. Statement of the problem
First , this report intends to find out the standard definition of GDP as well as the measurement of GDP. the definition of GDP will be divided into seven parts in order to study the measurement of GDP more easily. They are “the market value”, ”of all”, ”final”, ”goods and services”, ”produced”, ”within a country”, “in a given period of time”. Then we will talk about the components of GDP, especially the U.S GDP, including consumption, investment, government purchase, and net exports will be discussed. We will look their definitions will be looked up in the book of the principle of economics. we will especially study the components of U.S GDP. Next we this report will compare real GDP with nominal GDP based on their definitions as well asand demonstrate their differences with a numerical example. After that we will talk about the GDP deflator will be defined and what it reflects will be analyzed with. We will give it a definition and its computational formula as well asand explain it with a case study. Finally we will discuss whether GDP is a good reasonable and effective measure of economic well-being. an example will be applied to study international differences in GDP and the quality of life, as well as how economists measure a nation’s income. III. Research procedure
At the beginning of the research, the division of labor of five group members is as follows. All took the responsibility of collecting information about GDP from all kinds of sources such as the Internet, library, books like Economics and responses by economic professors. Then we sorted these data and also screened out important and useful information. In addition, these data or information are analyzed for better and deeper understanding . We compared different countries` GDP in different years. We asked other students about their knowledge of GDP and their own explanation of the function of GDP. According to our thinking, research and discussion, finally we grasp the real meaning of GDP and put this theory into practice, using GDP to assess the economic well-being of China and see whether it conforms to our own understanding. IV. Our findings:
Economic expansion accelerated dramatically in the 1990s as a result of mass privatizations, and the opening up of the country to foreign investment. Overseas firms rushed to build factories in China to take advantage of its low labor costs. In 2012，China’s GDP has reached RMB 51.9 trillion (USD 8.3 trillion), which was considered as the world's...