gross domestic product
DESCRIPTION
The Organisation for Economic Co-operation and Development has defined gross domestic product as “an aggregate measure of production equal to the sum of the gross values added of all resident institutional units engaged in production (plus any taxes, and minus any subsidies, on products not included in the value of their outputs).”TRANSCRIPT
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Gross Domestic Product
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Definition
The Organisation for Economic Co-operation and Development has defined gross domestic product as “an aggregate measure of production equal to the sum of the gross values added of all resident institutional units engaged in production (plus any taxes, and minus any subsidies, on products not included in the value of their outputs).”
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3 ways to estimate gross domestic product:
Expenditure basisIncome basis Output basis
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Nominal vs. Real GDP
• Nominal GDP is the actual gross domestic product that has not been adjusted for inflation. When inflation is not taken into account for the gross domestic product figure, it can be quite misleading.
• Real gross domestic product is a measure of the value of economic output that has been adjusted for price changes. They have been adjusted for inflation.
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