Topic 6 · macro
GDP and Economic Growth
To measure the size of an economy, you add up the value of everything it produces — the gross domestic product.
What GDP is
GDP is the market value of all final goods and services produced in a country in a year. It is counted three ways: by spending, by income, by value added.
Nominal and real
Nominal GDP is in current prices; real GDP is adjusted for inflation. To compare across years, use real GDP.
Economic growth
A rise in real GDP over time. Its sources are more resources, technology, and labour productivity.
🎯 Now possible
- explain what GDP measures
- tell nominal from real GDP
- name the sources of growth
Cheat sheet
GDP = C + I + G + (X − M) (by spending)
Final goods, not intermediate
Real GDP — for comparing across years
Growth = a rise in real GDP
Practice on this topic
Where to read more: Мэнкью — гл. 24, 26Макконнелл–Брю — макроэкономика