This chapter discussed one of the basics of macroeconomics: GDP (gross domestic product), or the market value of all final goods and services produced within a country in a given period of time. GDP measures the total income of everyone in the economy and the total expenditure of the economy's output of goods and services; where for an economy as a whole, income must equal expenditure due to the interactions of two parties: the buyers and sellers. The identity for GDP is Y=C+I+G+NX, and the GDP is typically calculated in time periods of a year or quarter (*the quarter rate usually presents GDP at an annual rate*).
Though this chapter went in depth about GDP, it threw a lot of vocabulary words at the reader and did not expand on ones that I felt needed more clarification. The FYI, which will be on the AP test, was very vague. Terms mentioned were GNP (total income earned by a nationals even if abroad), NNP (the total income of a nations's residents minus depreciation), National Income (total income earned by a nation's residents; excluding indirect business taxes and business subsidies), Personal Income (income that households and non corporate businesses receive; excluding retained earnings, subtracts corporate income taxes+contributions for social security, and includes interest and transfer program incomes), Disposable Personal Income (=Personal Income-(personal taxes+certain non tax payments)).
The chapter then went on to discuss the four components of GDP: consumption (C), investment (Y), government purchases (G), and net exports (NX), real versus nominal GDP, GDP Deflators, and the pros/cons of using GDP to measure economic well-being.
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