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ECONOMICS FOR MANAGERS

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Components of GDP

• Prsentor by:

- Snehal A. patel

(E.no.-2026)

- Komal nakrani

(E.no.-2035)

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Components of GDP• Gross Domestic Product• How to solve GDP

Y = C + I + G + (X-M)

(1) (2) (3) (4) (1) consumption

(2) investment

(3) government

spending

(4) net exports

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Components of GDP(1)Consumption (c) - Durable goods - Non-durable goods - Services (2) Investment (I) (3)Government spending (G) (4)Net exports (X-M)

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(1)Consumption (c)

“C” is private consumption the economy. Consumption is spending by households on goods & services.

Include - food - rent - medical expenses

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(1) Durable goods

This items have larger life span. Consider similar to a consumer investment8% GDPIts components - autos(3.6%) - furniture(3%)

Ovens

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Examples of durable goods

- Refrigerators- Washing machine-Toster- Ovens & etc.

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(2) Non –durable goods

Non durable items have shorter life span. 20% GDPIts components -food(10%) -clothing(2.7%) -fuel(2.4%)

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Examples of Non-durable goods

-Groceries-News paper-Foods-Cloths

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(3)Services:

Fastest growing component of component of consumer purchases has been the area of services40% GDP components -real estate(10%) -helthcare(12%)

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Examples of services

-Medical treatment-insurance -banking

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(2) Investment (I)

“I” is defiend as business investment capital.Ex. Investment in new mine company……..

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(3) Government spending (G)

“G” is the sum of expenditure on final goods and services. in concerned -salaries -weapons for military -etc.

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Examples of government spending

WeaponsSalaries & Etc.

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(4) Net exports (X-M)

(x-m) is gross exports.Incleding goods and services.

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CONCLUSION

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THANK YOU