ianroo

GDP = Gross Domestic Product　國內生產總值
GNP = Gross National Product　國民生產總值

Definition of GDP:
The market value of (unit = price = $$)
all 
final (not intermediate)
goods & services (tangible=goods; intangible=services)
produced within a country
in a given period of time

Definition of GNP:
Total income earned by a nation's permanent residents/citizens.

GDP measures:
Total income of everyone in the economy
Total expenditure on the economy's output of goods & services
☆Expenditure MUST == Income

Components of GDP:
(GDP = output = income = Y) = (C + I + G + NX)
C : consumption - spending by households on goods & services
I : investment - purchase of goods that will produce more goods & services in the future
                    ☆buyng a house  ∈ I, not C
                    ☆machines, equipments, capital, building...  ∈I
G : government spending - on goods & services
                    ☆ transfer payment like Social Security benefits doesn't count into G
                      ∵ not goods or services
NX : net exports = export - import = X - M
                    - export : foriegner buys dometiscally produced goods & services
                    - import : citizen buys foriegner produced goods & services

GDP properties:
good - GDP α economic growth & livings standard
bad - things not included in CIGNX (health, education, happiness...)
overall - not perfect, but a high GDP is good to lead a good life

Real GDP vs Nominal GDP:
Nominal = Σ (quantity x current price of the year)
Real = Σ (quantity x constant price of a base year)
Nominal - is affected by inflation
            - is used to calculate GDP deflator to show inflation
Real - is not affected by inflation
       - is what we see on TV
       - reflects actual amount of production or Δamount
       - reflects the economy's ability to satisfy people's needs and desire
       - is better in measuring how well the overall economy is performing

GDP deflator ∈a price level:
GDP deflator = (nominal GDP / real GDP) * 100%
If > 100% --> means there is inflation in price

Summary - GDP calculations:
Nominal GDP
Real GDP
Growth rate (% change) of Nominal, Real
Economic growth rate - 特指 Real GDP growth rate
GDP deflator
GDP deflator growth rate = Inflation Rate