Gdp Paper

Gross Domestic Product, or GDP, is the value of all final goods or services produced in an economy in a given year. It is split into four different components: consumption, investment, government spending, and net exports. Consumption is 66% of GDP, and is divided into three separate parts: durable goods, nondurable goods, and services. Investment is 17% of GDP, and is divided into four separate parts: residential construction, nonresidential construction, purchase of capital equipment, and changes in inventories. Government spending is also 17% of GDP, and is divided into three separate parts: state spending, local spending, and federal spending. Net exports is around 1% of GDP, and is calculated by subtracting imports from exports.
Consumption
The consumption component makes up approximately 66% of GDP. Consumption as a whole is measured by consumer spending, which, according to the Commerce Department, rose in February by 0.2% following a 1% increase in January. Real personal spending and personal income, however, both declined 0.2% in February. Personal savings fell $27.4 billion in February, and the personal savings rate declined to 4.2% from 4.4% in January. That makes sense, because if consumers are spending more they are saving less. Also, consumer confidence fell to 56.3 in February from 61.2 in January, its lowest final reading since 55.3 in November. A survey from the Reuters/University of Michigan Surveys of Consumers said that this occurred because of “expectations that the recession would grind on throughout this year and the jobless will keep rising.” The 12 month economic outlook index also fell to 31 in February from 47 in January; this is its lowest since 1980. Looking at these numbers, it is clear that the consumer does feel that the economy will be getting better any time soon.
Consumption is divided into three separate parts. The first of these is durable goods, which is affected the most during a recession. Durable