Chapter 4 Macro

• Gross domestic product (GDP) can be defined as total
• market value of all final goods and services produced within a country in a given time period.

• •  GDP may be calculated by summing total
• expenditures on all final output, or by summing the incomes derived from the production of that output.

• •  By the income approach, GDP is calculated as the sum of wages, salaries and supplements, gross operating surpluses, gross mixed income and indirect taxes less
• subsidies.

Real GDP is when you compare the GDP against a base to see the difference in price (inflation, deflation) over the years.

Balance of payments is a record of one countries transactions with all other countries during a specific time frame.  This is just another economic indicator of a country's relative value and, along with all other indicators, should be used with caution. The BOP includes the trade balance, foreign investments and investments by foreigners.

• - current account—(income and goods and services)
• - capitaland financial accounts (includes direct investments and portfolio investments and financial derivitives)