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Gross Domestic Product Term Paper

Gross Domestic Product (GDP) is the total value of goods and services produced in a country over a period of time. Most economists consider it to be the broadest indicator of a country's economic health. In the United States too, the GDP has been adopted as a key measure of economic activity since the early 1990s and the U.S. Bureau of Economic Analysis (BEA) regularly releases detailed GDP figures that are keenly tracked by the markets to gauge the current and future state of the economy. This paper discusses Gross Domestic Product with particular reference to the U.S. economy, describes how it serves as an indicator of the country's economic health and explains the components that make up the GDP. GDP and GNP

Until the early 1990s, the Gross National Product (GNP) rather than the Gross Domestic Product (GDP) was used by the U.S. To measure economic activity. The main difference between the two measures is that GNP indicates the total income earned by residents of a country regardless of where their assets are located while the GDP measures a country's...

(Watts, 2001) In practical terms, however, there is no major difference between the U.S.'s GNP and GDP figures. The GDP figures indicate the size of a country's economy as well as the living standards of its people. The United State's GDP is by far the biggest in the world and stood at a staggering $9.25 trillion in 1999. Its per capita GDP is also among the highest in the world at over $30,000. (Watts, 2001) Per Capita GDP figures, however, do not reflect the disparity in incomes levels of a country's population or the cost of living. GDP is an important indicator of the economy's health as it provides a broad sectoral detail including data about income as well as expenditure flows. The detail available in the GDP reports provides comprehensive information on supply and demand conditions, and enables the financial markets and economists to identify or predict developing imbalances in the business cycle. ("Economic Indicator," 1997)
How is GDP Calculated?

GDP…

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References

Economic Indicator: Gross Domestic Product" (1997). Brain Bank Website. Cool Fire Technology 1997. Retrieved on May 29, 2003 at http://www.cftech.com/BrainBank/FINANCE/GDP.html

Watts, Michael. (2001) "United States Economy." Article in Encyclopedia Encarta, 2002.

The switch was made by the BEA in December 1991 to make U.S. accounts more consistent with most other countries that use the United Nations System of National Accounts

The United Nations Development Program (UNDP) has recently introduced a Human Development Index that takes into account adult literacy, and life expectancy besides GDP to measure standard of living
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