Salerno's Classroom Celebrates America!
Eco Chapter 15
AP Government Summer Assignment
AP Chapters 1,2
AP Chapter 3
AP Chapter 4
AP Chapter 5
AP Chapter 6
AP Chapter 7
AP Chapter 8
AP Chapter 9
AP Chapter 10
AP Chapter 11
AP Chapter 12
AP Chapter 13
AP Chapter 14
AP Chapter 15
AP Chapter 16
U.S. History Chapters 1, 2, 3
U.S. History Chapter 4
U.S. History Chapter 5
U.S. History Chapter 6
U.S. History Chapter 7
U.S. History Chapter 8
U.S. History Chapter 9
U.S. History Chapter 10
U.S. History Chapter 11
U.S. History Chapter 12
U.S. History Chapter 13
U.S. History Chapter 14
U.S. History Chapters 16,17,18
U.S. History Chapters 19,20,21
U.S. History Chapters 22,23
U.S. History Chapters 24,25
U.S. History Chapters 26,27
U.S. History Chapters 28,29,30
U.S. History Chapter 31
U.S. History Chapter 32
U.S. History Chapter 33
US Government Chapters 1,2
US Government Chapter 3
US Government Chapters 10,11,12
US Government Chapters 13,14
US Government Chapter 18
US Govt Chapters 19,20,21
Remembering 9/11/01
The Civil Rights Movement
Economics Chapters 1,2,3
Eco Chapt 9
Eco Chapters 6,7,8
Eco Chapt 13
Eco Chapter 15
Eco Chapt 21

The Study of a Nation's Economy



                            Chapter 15



Gross National Product (GNP)

-the total dollar value of all final goods and services produced in the economy during one year's time.


Intermediate Goods - goods and services used in the production of final goods.  They are not factored in a nation's GNP.  EG. the steel used in the production of a car is not factored in a nation's GNP.  the car would be a factor.


Final Goods - are the goods that are factored in a nation's GNP.  Eg. We do not count the feed for a chicken but we do count the chicken.


               **The most important areas counted**



  I. Consumer Goods

a) durable and nondurable goods

b) services

 II. Investment Goods

a) New Plants and Equipment

b) Private Housing

c) Inventories


III. The Government Sector

a) Federal Government

b) State Government

c) Local Government




Personal Consumption Expenditures(64%)

From the Consumer

1/2 are from products sold

(cars... GM, Chrysler, Ford)

1/2 are services

(accountants, lawyers)



+ Gross Private Domestic Investment(15%)

Total amount spent on capital goods

eg. machinery to produce goods

  capital investment

+ Government Purchases or Expenses(18%)

Salaries, wages(President, Senators)

Defense, Research

(do not include transfer payments = welfare)


+ Net Exports (3%)

Goods that leave the country minus goods that enter the country




The economic condition in which the average level of prices goes up



(not calculated in GNP)


Measuring Real GNP


Changing current dollars into constant dollars by counting inflation



Constant Dollar GNP =


                        Current Dollar GNP


                           Price Index


                       The Result

                             Real GNP



Barter System is classified as

irregular economy

   *EBay Trading*


Production Possibilities Curve

          A graphic illustration of the combinations of output an economy can produce if all of its resources are utilized effectively




*Per Capita Income =           GNP/Population



While using the data obtained from the gross national product, it is necessary to keep in mind the following five things.


1.       The GNP must be corrected to reflect the real production and income figure. (Use Formula)


2.       The Data should be converted to per Capita figures to make them more meaningful


Enter supporting content here