21.2 Measuring U.S. GDP

MyEconLab Concept Video

U.S. GDP is the market value of all the final goods and services produced within the United States during a year. In 2016, U.S. GDP was $18.3 trillion. The Bureau of Economic Analysis in the U.S. Department of Commerce measures GDP by using two approaches:

  • Expenditure approach

  • Income approach

The Expenditure Approach

The expenditure approach measures GDP by using data on consumption expen­diture, investment, government expenditure on goods and services, and net exports. This approach is like attaching a meter to the circular flow diagram on all the flows running through the goods markets to firms and measuring the magnitudes of those flows. Table 21.1 shows this approach. The first column gives ...

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