Gross Domestic Product ( Gdp ) Essay
The Gross Domestic Product (GDP) is the market value of all final goods and services produces within a country in a given period of time (Mankiw,2015). It looks at how the economy is doing. Author N. Gregory Mankiw uses an example of judging a person by seeing how a person lives. What kind of home he/she has, how much money is he/she making? This is similar to what GDP does for the economy. It judges how well the economy is doing. GDP is divided into four components: consumption, investment, government purchases, and net exports. Each area is analyzed to see the kinds of spending that ultimately make up GDP.
Gross Domestic Products and its Components
Gross Domestic Product (GDP) is divided into four components: consumption, investment, government purchases, and net exports. These components are what economist use to understand how the economy utilizes its scares resources (Mankiw,2015). Consumption is defined as the spending by households on goods and services. Goods such as automobiles and appliances, good and clothing. Services include intangible services such as haircuts and medical care (Mankiw,2015). Eve very day items that are being purchased are considered consumption which accounts for more than two-thirds of GDP for the U.S. economy (Commerce, 2016). I find myself spending more often due to the availability of items. Online marketplaces like Amazon.com have made shopping so easy and convenient, that I feel like I overspend,…