Answer to Question #286955 in Macroeconomics for Mbk

Question

Find data on GDP and its components, and compute the percentage of GDP for the following components for 1950, 1975, and 2000.

a. Personal consumption expenditures; b. Gross private domestic investment; c. Government purchases; d. Net exports; e. National defense purchases; f. State and local purchases; g. Imports

* Do you see any stable relationships in the data? Do you see any trends? (Hint: A good place to look for data is the statistical appendices of the Economic Report of the President, which is written each year by the Council of Economic Advisers. Alternatively, you can go to www.bea.doc.gov, which is the Web site of the Bureau of Economic Analysis.)

Answer 1

GDP = final consumption + gross capital accumulation (investments in a firm, that is, the purchase of machines, equipment, stocks, production sites) + government spending + net exports (export - import; can be both positive and negative).