StudentShare solutions

# Gross Domestic Production - Essay Example

## Extract of sampleGross Domestic Production

From the above equation employee compensation, operating surplus and mixed income added together are referred to as factor income. It is therefore evident that this method involves adding up income earned by factors of production.
This is another method used in calculating GDP and the method involves adding up the unit rise in prices of products in the production stages. Therefore this method involves adding up contributions of the factors of production that add value to a product. Value is added either through services rendered and goods used to process final products.
However calculation of GDP using the above three methods should be the same, the expenditure method is commonly used in many countries to calculate GDP due to the availability of data, the following is an analysis of changes in GDP due to increase in production and change in price.
The following information on the production of a good is provided, Lenovo produces 10,000 units of a product with a market value of 2,000 each in 2009 December; however no units are sold until spring of 2010. The following are the requirements:
For this reason therefore the Lenovo products produced and not sold in this year will increase the level of investment in terms of an increase in inventory, the following is a summary of the calculations:
Given that 10,000 units were produced and the market price of these products is 2,000 then it is possible to determine the GDP level increase as a result of this production, the value of these products is determined by multiplying the quantity produced and the prevailing market price, and the following formula is used:
Value of products = quantity X price (Obstfeld (1997))
Substituting the values as follows:
10,000 X 2,000 = 20,000,000 dollars
From the above calculation therefore it is evident that the GDP level in 2009 will increase by 20,000,000 dollars, this increase will be as a result of the increase in investment in the year 2009.

b) GDP increase in 2010:
The GDP level will be affected in 2010; there will be an increase in consumption in this year ...Show more

## Summary

Stutely (2003) defines GDP as the total value of all products which include all goods and services produced in a country in a year. The GDP level is an important measure that is used to determine economic performance of a country, the GDP level is compared with previous values to calculate economic growth and performance, it is also used to compare two countries economic performance…
Author : jaydelegros
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Gross Domestic Production"
with a personal 20% discount.
Grab the best paper

### Related Essays

How the US corperate tax effects international business
The research delves into corporate tax effects on international business. The research looks at some corporations’ tax reduction schemes. United States corporate tax rates significantly affect international business. Discussion The United States corporate tax affects international business International business includes one country selling its products and services to the global marketplace.
7 pages (1750 words) Essay
Gross Domestic Product Essay
The methodologies include Production Approach, Income Approach as well as expenditure approach however what is most important is the fact that all three commonly used methodologies present the GDP at price levels i.e. at current market price and at constant market prices.
11 pages (2750 words) Essay
Gross Domestic Product and Welfare
It should be noted that the three countries under consideration represents the largest countries in the world in terms of land area. Canada leads with a total area of 9.984 million square meters while United States and China have 9.826 million square meters and 9.596 square meters respectively (CIA World Factbook 2007).
4 pages (1000 words) Essay
Gross Domestic Products
Economic factors include some changes in government policies such as taxes and interest rates. Non-economic reasons include factors such as war, drought, natural and man-made disasters. The real measurement of a country’s GDP is termed as real GDP wherein the level of a gross domestic product after changes in inflation has been taken into account.
6 pages (1500 words) Essay
Inflation and GDP
The Phillip curve was first coined by William Phillip in 1958, the curve depicts the relationship between inflation and unemployment, according to the Phillips curve unemployment and inflation are inversely related whereby high inflation will result into lower unemployment levels while low inflation results into high unemployment levels, therefore the cost of reducing inflation is unemployment, therefore the curve can be used in decision making whereby policies can be used to increase or reduce inflation in order to adjust unemployment, the following diagram shows the Phillips curve:
8 pages (2000 words) Essay
Gross Domestic Product Master Essay
GDP is often expressed as either nominal or real GDP. When UK GDP trend from 1948 to 2005 is expressed in these measures and are graphed together, it should be noted that this will result into two different lines indicating the disparity between their values.
6 pages (1500 words) Essay
Gross Domestic Product
The data used to build and refine the econometric model was extracted from the Economic Trend Annual Supplement (ETAS) presented by the British Office for National Statistics (ONS). This was accomplished by applying fundamental econometric methods such as linear regression, misspecification testing, and hypothesis testing using the computer package E-Views.
8 pages (2000 words) Essay
Gross Domestic Product Bachelor Essay
As such it is an indicator of a country's standard of living. Gross Domestic Product (GDP) is defined as "the total value of final goods and services produced within a country's borders in year, regardless of ownership (Gross Domestic Product 1)." In national income accounting, GDP differs with Gross National Product (GNP) as the latter includes inter-country income transfers.
3 pages (750 words) Essay
Gross Domestic Product (GDP)
teresting to compare healthcare indicators for the US as a developed country and the one who spends large amount on healthcare with Bangladesh as a developing country and the one who spends small amount on healthcare. World Health Organization (2013) reports that Bangladeshs
1 pages (250 words) Essay
The Body Shop enter the Chinese cosmetics market
Further, China is expected to surpass the United States economy during 2019 (Li, 2010). Setting up the Body Shop branch in China will generate high revenues, high customer demand, and profits. China’s economic environment continues to improve (Arnon,
14 pages (3500 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger