Gdp Essay

GDP Essay

GDP is considered the most closely watched economic statistic because it is thought to be the best single measure of a society’s economic well-being. In terms of economic well-being, I’m referring to an individuals or societal well-being, which can be broken down into two categories, Quality of life and Material Living Conditions, for example. Some examples within Quality of life are education and skills, environmental quality, personal security, work and life balance, health status, etc. Some examples within Material Living Conditions can involve income and wealth, jobs and earnings, and housing (OECD Framework for Statistics on the Distribution of Household Income, Consumption and Wealth, pg 28). A country containing a considerably high GDP has the ability to obtain this desired living standard. According to the textbook, Principles of Economics, author Gregory N. Mankiw, defines Gross Domestic Product (GDP) as the , “market value of all final goods and services produced within a country in a given period of time.” This given period of time is usually measured within a given year or by quarters (three months). Within that time period, GDP measures the economy’s flow of income and expenditure and the U.S. Department of Commerce Bureau of Economic Analysis (BEA) gathers this data and releases a report, illustrating how the country is doing quarterly. My goal in this essay is to compare current data from previous data and from that data I will provide an analysis and snapshot on the overall performance of the United States of America.

“To understand how the economy is using its scarce resources, economists study the composition of GDP among various types of spending” (Mankiw, pg 496). The components of GDP are expressed in the following equation, Y= C + I + G + NX; GDP (Y), consumption (C), investment (I), government consumption (C), and net exports (NX). The total of the four components must equal to GDP. Let’s take for example...