Go to the Bureau of Economic Analysis at this Web site, and look up the latest n

Question

Go to the Bureau of Economic Analysis at this Web site, and look up the latest new release for real GDP. Address the following questions after reading the latest release:

Where is the United States in the business cycle?

What is the real GDP today?

What is the largest component of GDP?

What is the smallest component of GDP?

What is the fastest growing component of GDP, and why?

What components of GDP were involved in the change from last month to this month?

What is the price index today?

What caused the change?

Explanation / Answer

Real GDP.......................................... 2.2 1.9 1.9
Current-dollar GDP................................ 3.8 3.6 3.9
Gross domestic purchases price index.............. 2.4 2.4 2.6

difference between nominal and real GDP
ans
GDP, or Gross Domestic Product is the value of all the goods and services produced in a country. The Nominal Gross Domestic Product measures the value of all the goods and services produced expressed in current prices. On the other hand, Real Gross Domestic Product measures the value of all the goods and services produced expressed in the prices of some base year. An example:
Suppose in the year 2000, the economy of a country produced $100 billion worth of goods and services based on year 2000 prices. Since we're using 2000 as a basis year, the nominal and real GDP are the same. In the year 2001, the economy produced $110B worth of goods and services based on year 2001 prices. Those same goods and services are instead valued at $105B if year 2000 prices are used. Then:
Year 2000 Nominal GDP = $100B, Real GDP = $100B
Year 2001 Nominal GDP = $110B, Real GDP = $105B
Nominal GDP Growth Rate = 10%
Real GDP Growth Rate = 5%
Once again, if inflation is positive, then the Nominal GDP and Nominal GDP Growth Rate will be less than their nominal counterparts. The difference between Nominal GDP and Real GDP is used to measure inflation in a statistic called The GDP Deflator.

components of Gross Domestic Product (GDP)

The components of Gross Domestic Product (GDP) tell you what the U.S. is good at producing. That's because GDP is the country's total economic output for each year. The Bureau of Economic Analysis has subcategorized GDP into four major components.

1]Personal Consumption Expenditures
2]Business Investment
3]Government Spending
4]Net Exports of Goods and Services

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