ModuleInterpretingReal GrossDomestic Product

KRUGMAN'SMACROECONOMICS for AP*

11

Margaret Ray and David Anderson

What you will learnWhat you will learn

in thisin this ModuleModule::

• The difference between real GDP and nominal GDP

• Why real GDP is the appropriate measure of real economic activity

What GDP Tells UsWhat GDP Tells Us

• Economic Size

• Comparison

Relative size of country indicates relative size of Gross Domestic Product

• Inflation’s effect on GDP

• Aggregate Output

Real GDP: A Measure of Real GDP: A Measure of Aggergate OutputAggergate Output

Calculating Real GDPCalculating Real GDP

What Real GDP Doesn’t What Real GDP Doesn’t MeasureMeasure

• Real GDP v. GDP per capita

• Living Standards

• Limitations of Real GDP per capita