Macroeconomics

Lesson 2
Measuring GDP
Gross domestic product (GDP)
* Definition
Gross Domestic Product
•Gross: overall
•Domestic: home, internal GDP
•Product: things that people made
Gross domestic product (GDP)
* Definition
Gross Domestic Product is the market value of all final
goods and services produced within a country in a given
period of time (usually 1 year).
Gross domestic product (GDP)
Gross Domestic Product is the market value of all final goods and services
produced within a country in a given period of time (usually 1 year).

• The value of products in a market

• GDP: add together many kinds of products…

should have the same (measured) UNIT

Market value
Gross domestic product (GDP)
Gross Domestic Product is the market value of all final goods and services
produced within a country in a given period of time (usually 1 year).

• Example 1:

Products Rice Car

Time (Tons) (Items)
Year 1 7,000 1,000
Year 2 5,000 1,200

• Q1: More effective: rice or car?

• Q2: Which one add higher amount to income?
• A: Using market values (Selling price)
Gross domestic product (GDP)
Gross Domestic Product is the market value of all final goods and services
produced within a country in a given period of time (usually 1 year).

• Finished
• Last use purpose; NOT intermediate product/service
• NOT be sold again as part of some others
Gross domestic product (GDP)
Gross Domestic Product is the market value of all final goods and services
produced within a country in a given period of time (usually 1 year).

• Example 2: A final prod./serv.:

• In this case: - The eggs ARE final products!

- Values of these eggs ADD to GDP!
Gross domestic product (GDP)
Gross Domestic Product is the market value of all final goods and services
produced within a country in a given period of time (usually 1 year).

• Example 2: NOT final prod./serv.:

• In this case: - The eggs ARE NOT final products!

- Values of these eggs DO NOT ADD
to GDP!
Gross domestic product (GDP)
Gross Domestic Product is the market value of all final goods and services
produced within a country in a given period of time (usually 1 year).

GOODS SERVICES

Health care; car repair,

Examples TV, Car, Bike…
Business/ Trading

Recognize Physical objects Human activities

Tangible Intangible

Characters CAN BE STORED CANNOT BE STORED

BE PRODUCED BE PERFORMED
Gross domestic product (GDP)
Gross Domestic Product is the market value of all final goods and services
produced within a country in a given period of time (usually 1 year).

• “…produced…” Used car

for sale
Gross domestic product (GDP)
Gross Domestic Product is the market value of all final goods and services
produced within a country in a given period of time (usually 1 year).

• geographic confines of a country (Inside borders)

• Products made inside the country
• Do not care about nationality of people who make
products or provide services
Gross domestic product (GDP)
Gross Domestic Product is the market value of all final goods and services
produced within a country in a given period of time (usually 1 year).

• Example 3:
• Samsung Vietnam
• Korean & VN staffs
• GDP to Thai Nguyen & VN
Gross domestic product (GDP)

To conclude:
• Gross Domestic Product is…
• the market value of…
• all final goods and services…
• produced within a country…
• in a period of time (usually 1 year).
Thank you