Principles of Macroeconomics

Topics: Gross domestic product, Measures of national income and output, Purchasing power parity Pages: 2 (934 words) Published: November 2, 2014

Data Exercise One
ECON 201: Principles of Macroeconomics
September 5, 2014
To live in an economy that is not negatively impacted by recession, downsizing, or business capsizing would be ideal. The unfortunate reality is that we are faced with economic situations that will be either helpful or hurtful to us all. Over the last few quarters between 2013 and 2014 the U.S. Bureau of Economic Analysis (BEA), conducted an analysis that reflects the changes in GDP. During this time the Nominal GDP was much greater than the Real GDP. Expenditures Approach to Calculating GDP

-638175208978500From 2013 through 2014 the Nominal GDP was greater because the values during that time were not adjusted. It is understood that Nominal GDP is the value of GDP in current dollar and Real GDP is the value of those dollars after adjustments or changes in prices. For the most recent quarter, the percentage change was -$20.1. The difference is within the Net Exports of Goods and Services. Below is a table that reflects such. Income Approach to Calculating GDP

2nd QTR 2013 3rd QTR 2013 4th QTR 2013 1st QTR 2014
GDP 16,619.2 16,872.3 17,078.3 17,044.0
GNP 16,711.2 17,103.1 17,321.2 17,255.0
Net National Product 14,221.3 14,462.9 14,650.6 14,556.3
National Income 15,511.5 14,650.5 14,770.2 14,733.7
Personal Income 14,131.3 14,247.4 14,311.7 14,484.7
Gross Domestic Product or GDP is the total value of final goods and services produced in a given year. GDP is comprised of four basic categories. Those categories are Consumption Expenditures, Private Investment Expenditures, Government Purchases and Net Exports. Gross National Product or GNP is the total of final goods and services produced in a given year by another country. The difference between the two can be easily identified by understanding that GNP include foreign net income opposed to considering net exports and imports. Based on the table provided above, to determine GNP from GDP you have to include the value of...
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