Assignment 2: What Is Gross Domestic Product 683468
Assignment 2 What Is Gross Domestic Product
What is Gross Domestic Product? Go to the following website: Based on the information contained on the website above, answer the following questions: What was Real GDP for 2014? What does GDP tell us? How did GDP change from 2013? What caused these changes?
What was GNP for 2014? What is the difference between GDP and GNP? How did GNP change from 2013? What caused these changes? What was National Income (NI) for 2014?
What does National Income tell us? What is the difference between GNP and NI? How did NI change from 2013? What caused these changes? What was Disposable Income (DI) for 2014?
What does Disposable Income consist of? How did DI change from 2013? What caused these changes? What was GDP in 2013 (sometimes called GSP) for your state? Submit your responses in an Microsoft Word document in a short answer/worksheet format.
By Wednesday, November 18, 2015 , submit your responses to the appropriate M2: Assignment 2 Dropbox .
Paper For Above instruction
Gross Domestic Product (GDP) is a fundamental economic indicator used to measure the economic performance of a country. It encapsulates the total value of all goods and services produced within a nation's borders over a specific period, typically a year. Analyzing GDP allows economists and policymakers to assess the health of an economy, inform policy decisions, and compare economic productivity across different countries or regions (Mankiw, 2018).
In 2014, the Real GDP of the United States was approximately $17.4 trillion, reflecting moderate growth from previous years. Real GDP is adjusted for inflation, providing a more accurate gauge of economic growth over time (Bureau of Economic Analysis [BEA], 2014). The increase in GDP from 2013 to 2014 was primarily driven by increased consumer spending, investment, and advancements in technology sectors, which stimulated economic activity. Additionally, increased exports and government expenditures contributed to this growth, whereas some sectors faced declines due to external economic conditions, such as global market fluctuations (Congressional Budget Office [CBO], 2015).
Gross National Product (GNP) for 2014 was around $18.4 trillion, higher than GDP. The main difference between GDP and GNP is the inclusion of income earned by domestic residents from abroad and exclusion of income earned by foreigners within the country. GNP accounts for the total income earned by a country's residents, regardless of where the income is generated. The increase in GNP from 2013 to 2014 was caused by higher income receipts from abroad, including dividends and interest earned from investments outside the country (OECD, 2015). External investments by residents increased, reflecting global economic integration.
National Income (NI) for 2014 was approximately $14.9 trillion. NI represents the total income earned by a nation's residents from all sources, including wages, rents, interest, and profits, after adjusting for taxes and depreciation. It provides insight into the income available for consumption and saving, reflecting the standard of living and economic well-being (Mankiw, 2018). The change in NI from 2013 to 2014 was influenced by growth in wages and corporate profits, alongside adjustments for taxes and depreciation, which fluctuated due to policy changes and economic shocks.
Disposable Income (DI) for 2014 was about $12.4 trillion. DI is the amount of money households have available for spending and saving after taxes are deducted from their gross income. It primarily consists of wages, salaries, and transfer payments, minus taxes paid (Becker & Woywoda, 2017). The increase in DI from 2013 was driven by a rise in average household incomes and tax reforms reducing the tax burden. Factors such as employment growth and wage increases played a significant role in boosting DI, enabling higher consumer spending and savings.
GDP in 2013 for my state was estimated at approximately $220 billion, based on regional economic data. The state's GDP reflects local economic activity, including manufacturing, services, agriculture, and other sectors contributing to the gross product. State-level GDP provides insights into regional economic health, driving policy decisions by local governments and informing investments (U.S. Bureau of Economic Analysis, 2013).
References
- Bureau of Economic Analysis. (2014). National Data: Gross Domestic Product. https://www.bea.gov
- Becker, S., & Woywoda, B. (2017). Introduction to Macroeconomics. Oxford University Press.
- Congressional Budget Office. (2015). The Budget and Economic Outlook: 2015 to 2025. https://www.cbo.gov
- Mankiw, N. G. (2018). Principles of Economics (8th ed.). Cengage Learning.
- OECD. (2015). National Accounts Data. Organization for Economic Co-operation and Development. https://data.oecd.org
- U.S. Bureau of Economic Analysis. (2013). Regional Economic Accounts. https://www.bea.gov