From the course: Economic Indicators

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GDP overview

GDP overview

From the course: Economic Indicators

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GDP overview

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- Wouldn't it be nice if there was one common way to talk about economic growth? Fortunately, there is. When people talk broadly about the actual rate of growth in an economy, they're almost always talking about GDP, which stands for gross domestic product. When people say that the US economy grew at 2% last year or Germany grew by 3% last quarter, they're talking about GDP. And GDP includes all new activity, all new goods and services produced inside the border of a country. GDP is comprised of four main categories of growth activity, and this is true in any economy. Consumption, what people are buying. Business investment, what companies are spending their money on to grow. Net exports, that's the balance of trade, exports minus imports, which can be negative. And government spending, what the government is spending money on. GDP includes everything new made in an economy, all the new cars, new construction, new schools, new investments, and new government expenditures. In the…

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