explain how GDP is calculated Go to the Bureau of Economic A

explain how GDP is calculated. Go to the Bureau of Economic Analysis website, www.bea.gov, and access the BEA interactively by selecting \"National Accounts\" and then \"National Income and Product Account Tables.\" Select \"Frequently Requested NIPA Tables,\" and find Table 1.1.1 on GDP. What is the current GDP growth rate for the U.S.?

Solution

The Gross Domestic Product or GDP of a country provides a measure of the monetary value of the goods and services it produces in a specific year. This is an important statistics that indicates whether an economy is growing or contracting.

One way of calculating GDP of a country is to take into account the monies spent by the different groups that participate in the economy. Thus, a country’s GDP is a measure of consumer spending (C), plus business investment (I), and government spending (G) as well as its net exports, which is export minus imports (X_M).

Y = C + I + G + (X - M).

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