ALL THINGS BIG AND SMALL 2.0

I believe that everybody-and that includes your kids-should have some basic knowledge of economics and be financially literate. Else you are at a disadvantage in today's world. * for the full .pdf document you can email me and I will send to you. Lesson 1: What is GDP (Gross Domestic Product) * We use the US economy as our case study. And the data source is FRED (US Federal Reserve Education Department) GDP — Gross Domestic Product — is the total value of everything a country makes and sells in a year: every burger, haircut, movie ticket, house, and computer chip. It's the best single number we have for measuring the size of an economy. Right now, the US economy produces goods and services at a pace of about $31.9 trillion per year — that's $31,900,000,000,000! Economists count GDP by adding up four kinds of spending. The equation looks like this: GDP = C + I + G + (X - M) . See attached Table 1 for what this equation means. Now let's plug the real numbers into the equ...

Hardly a week passes by that we do not read articles in the newspapers, or hear on news broadcasts, the word "Gross Domestic Product" [GDP] when the subject is economic growth or comparison of living standards among countries. While statistics can be enlightening, statistics can also lie if you are not really clear about what GDP means and how it is calculated. Here is an article abstracted from my weekly newsletter for www.valuengine.com , which attempts to illustrate what is, and what is NOT GDP and some of the problems associated with any attempt to compare GDP across countries. A nation is like a corporation. Its production, income, and expenditure can be measured according to accounting principles, and a figure arrived at, that hopefully gives some information on the 'well-being' of the nation/corporation. This is the subject of National Accounts, and Gross Domestic Product is one of the measures in National Accounts. GDP measures the size of the U.S. Economy, ...