GDP and Growth
Gross Domestic Product (GDP) means everything that is produces and all services provided within the United States. It is the measurement of all goods and services that are produced within the economy (McEachern, 2012, p. 70). The GDP for the United States is $15.09 Trillion, China is $7.3 Trillion, India is $1.85 Trillion, and Turkey is $773.09 Billion. The level of consumption spending in the U.S. economy for the past 40 years is 67%. The level of Gross Investment spending in the U.S. economy for the past 40 years is 16%. The level of government spending in the U.S. economy for the past 40 years is 19%, and the level of net exports in the U.S. economy for the past 40 years is -16%.
Personal consumption accounts for the growth rates for the United States. Exports have been a rising proportion of GDP for China; there is such a high demand for Chinese goods. With the world economy growing, many economies have been willing to import cheap manufactured items from China. Personal consumption also accounts for India’s growth rates. Gross Investment accounts for Turkey’s growth rates. Consumer spending accounted for the change in spending in the four components to GDP in the U.S. economy for the past 40 years.
When consumer spending is high, the total GDP reflects this consumer confidence through higher GDP figures establishing a direct connection between consumer spending and GDP. Calculating how much individual households spend in the period under consideration derives consumer spending. Such as durable and nondurable goods. The durable goods refer to products like houses, cars and other items that generally last more than three years. Nondurable items include products like food and other perishable items that last less than three years. The total demand for such products makes a difference in the final GDP calculations. When consumer confidence is low, this is reflected in reduced spending and more saving. When consumers are more concerned with...