http://youtu.be/t9lVEyYWWQk Watch this video that gives you information on the difference between GDP & GNP.
Gross Domestic Product: total market value, of all final goods and services, produced within a countries borders in a given year.
Gross National Product: total market value of all final goods and services by citizens of that country on its land or foreign land.
What's INCLUDED in Gross Domestic Product (GDP)
1. 65% C- Personal Consumption Expenditures
2. 17% IG- Gross Private Domestic Investment known as:
-Factor equipment maintenance
-New factory equipment
-Construction of housing
-Unsold inventory of product built in a year (houses)
3. 20% G- Government spending (Americans)
4. 2% Net Exports -XN (Exports-Imports)
What's NOT included in Gross Domestic Product
1. Intermediate Goods (goods that require further processing before they are ready for final use) (CAR)
2. Use or Second Hand Goods (avoid double county) -buying a car from 1997 or a buying clothes from a thrift shop-
3. Purely Financial Transactions (Stocks and Bonds) this does not involve the product of a good or service because it is heavily a transfer of assets. (Not durable)
4. Illegal activity (drugs)
5. Unreported Business Activities (unreported tips)
6. Transfer Payments -money that comes (Social Securtiy Check from the government or private scholarships)
7. Non-Market Activity
-Volunetrering
-Baby-sitting
-You peforming work for yourself. (Fix the roof of your house, fix your gate)
http://youtu.be/T2LPQe2Y72Q watch this video for deep information into what's not included in GDP.
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