Gross Domestic Product (GDP) and Recession

tootsieharveystories By tootsieharveystories, 17th Apr 2011 | Follow this author | RSS Feed | Short URL
Posted in Wikinut>Money>Economics

What is “Gross Domestic Product” (GDP), and how is it determined each month? What does the term “Recession” mean and how do we know when one occurs? How does government intervene to move the economy out of a recession?

Gross Domestic Product (GDP)

Gross Domestic Product (GDP) is the market value of goods and service produced by a country. It is determined by:

GDP = Consumption
+ Investment
+ Government Purchase
+ Net Exports

A recession is described as a reduction in GDP for two consecutive quarters. Usually a country, state, city, county, or community can be in a recession for six months before National Bureau of Economic Research (NBER) declares one. How to survive a recession would be a significant impact on the economy, extremely high oil prices, natural disasters, overheated markets, or collapse of an industry or market.

Government intervention in the markets attains two goals: Social efficiency and equity. This is achieved where the marginal benefits of a society for production or consumption are equal to the marginal costs of production or consumption. The government also intervenes to correct problems like inflation. › Society › Economics

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author avatar Denise O
17th Apr 2011 (#)

At times I wish the government would just stay on vacation. Who knows maybe we can get ourselves out of this mess. I doubt it will be any time soon. Since it seems we are really in a depression here in the states. Nice read. Thank you for sharing.:)

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author avatar tootsieharveystories
18th Apr 2011 (#)

Thanks for the comment Denise.

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author avatar Jerry Walch
18th Apr 2011 (#)

Hhhhmmmm A trip back to economics 101

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author avatar tootsieharveystories
18th Apr 2011 (#)

Thank you Jerry for the comment.

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