Tuesday, January 4, 2011

Post 11

Mr. Campbell asked us to use the 4x3 technique. 3 rules and 4 ingredients to create a recipe or math forula that explains how GDP is calculated.

GDP = private consumption + gross investment + government spending + (exports − imports)

-Includes only goods and services purchased by their final users, so GDP measures final production.

-Counts only the goods and services produced within the country's borders during the year, whether by citizens or foreigners.

-Excludes financial transactions and transfer payments since they do not represent current production.

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