02/02/14 GDP & GNP

• GDP (Gross Domestic Product)- Total value at all final goods and services produced within a countries borders within a year.
• GNP (Gross National Product)- Total value of all final goods and services produced by Americans within a given year. (Gross National Product)
• GDP
• All production on income earned in the U.S.
• If product is produced on American soil, it is added on our GDP.
• What is included and excluded in GDP?
• Included
• Final goods and services
• Income earned (wages, interest, etc.)
• Interest payments on cooperate bonds.
• Current production of a final goods.
• Unsold outputs (business inventories.)
• Excluded
• Intermediate goods. (Something used to  make another product.)
• Transfer payments (public or private) Social security, unemployment, compensation, scholarships.
• No sell of stocks or bonds (purely financial transaction.)
• Used or second hand goods.
• Non- Market transactions (babysitting, illegal drugs, prostitution, do it yourself projects, growth of crops for personal consumption)
• Calculating GDP