A Summary Of The Gross Domestic Product

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An economy can usually be understood and judged on efficiency through a number of different statistics, one of these is the GDP or the Gross Domestic Product. The Gross Domestic Product is the sum of four different components: Consumption, Investment (business and personal), Government Purchases, and Net Exports. The anticipated cost of living in an apartment will eventually prevent people from moving out. This is because with a shortness in the labor force the supply for apartments goes down so the demand goes up causing the price of renting that apartment to skyrocket accordingly. With a spike in price going up that leaves people less money to save up and move out, which lowers the overall total of the Investments component of the Gross Domestic …show more content…
This would be deemed as structural unemployment, a long term job hunt that often seems endless in the end. Another example of the Investments component of the Gross Domestic Product decreasing and causing a decrease in the GDP is, “Millennials are finally moving out of their parents ' basements, largely as a result of strong job growth.” Although these Millennials are now able to move out of their parents’ basements financially there is little guarantee that banks approve their requests for mortgages. According to Paul Davidson from USA Today, banks are stricter on their lending standards post a recession. This makes it hard for most of these Millennials don’t qualify for mortgages and cannot put a down payment on a house which decreases both Investments and GDP. While saving and spending on mostly housing people have less money to buy normal goods. This causes a dip in prices which effects the difference between Nominal and Real GDP. Nominal GDP considers only the price and quantity of that exact year while Real GDP accounts for the price of the year before with the quantity of this …show more content…
When the Gross Domestic Product decreases that means the market value of the goods and services in my country that I may produce or hold stock in, it definitely affects me not only financially but also what steps need to be taken next. Also if there was a change in unemployment whether positive or negative it affects me directly as a college student who is studying to get a degree and one day enter the Labor Force. So a change in unemployment would change the nature of the job hunt I experience as soon as I graduate from the University of San Diego. In terms of inflation having an affect on me, Inflation affects the purchasing power of the consumer. I although I try and not blow through my paychecks; I do enjoy spoiling myself every once in awhile and having to pay extra for normal goods affects a college student like myself who tries to stay to a strict budget. Although I am one of many, the decisions and policies put in place do take a toll on my wallet just as it would any middle-class suburban

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