GDP: Explained - Key for Economic Activity & Development - Essay Sample

Introduction

The explanation of the Gross Domestic Product has been explained in Chapter 8, and the website used for the discussion. In both discussions, the GDP is explained to be an essential element of the economic activity within an ecosystem or a region. The growth or decline of the GDP would result in the development or fall of the region’s businesses and concepts used in the economy (Blair & Rush, 2019). For instance, the chapter discusses the study of macroeconomics concerning the GDP as the total measure of production and income of a country and the nature in which it has affected many companies in their quest to attain growth over the years.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

The chapter discusses the reason for understanding the GDP, as it would be essential to acknowledge the business cycle, which would be used in attaining economic growth. On the other hand, the website explains the use of the GDP in forecasting the growth of the Bank of Atlanta (Federal Reserve Bank of Atlanta, 2017). The bank has used the current GDP to establish ways in which they can understand the future of their organization, which is the same strategy applied by the U.S. Bureau of Economic Analysis.

The use of the GDP by the companies is explained as to how organizations measure the current performance in the market and the estimated growth in the future. Further, the mathematical results used in establishing the GDP is essential in establishing the correct estimation of the required outcome. Through the chapter, one will understand the several mathematical concepts used in estimating economic growth (Mishkin, 2018). For instance, the chapter discusses the National Income Accounting as the methods that apply to the mathematical concept of tracking the total production and the total income in the economy.

Through the understanding of the National Income and Product Accounting, the calculations of the economic outcome would be realized by establishing different forms of economic outcomes. The chapter discusses the different economic activities through the measures of the total income and the total production within the ecosystem. For instance, the discussion on the Gross National Product indicates that it is the value rendered to the final services and goods that would be produced by the residents in the country and within the ecosystem that would be used in facilitating the economy (Mcclave, 2017). The explanation of the GNP uses the case study of the Ford assembly plant in the U.S. has to deal with competition from other parts of the word within the same market (Blair & Rush, 2019). The illustration of the Bureau of Economic Analysis also uses the explanation of the National Income to give an understanding of the production of goods and offering of services within an economy and the expected outcome. For instance, the concept uses the concept of depreciation of products that are used in the economy, such as equipment, machinery, and buildings. Many of the tools would be worn out over the years and would lose their values.

The aspect of connecting the GDP within the economy and the connection with how the company would grow is used by Bank of Atlanta, which mimics the concept portrayed by the Bureau of Economic Analysis. The bank uses the GDP to forecast on the outcome and the estimated nature of conducting business now and the future. The same concept is explained in the chapter and uses an example of companies such as Ford in estimating their outcome and competition in the market.

References

Blair, R., & Rush, M. (2019). The economics of managerial decisions. Pearson Education Limited.

Federal Reserve Bank of Atlanta. (2017). GDP now. Retrieved 2020 November 28, from https://www.frbatlanta.org/cqer/research/gdpnow.aspx

Mcclave, J. (2017). Statistics for business and economics. Pearson Education Limited.

Mishkin, F. (2018). Economics of money, banking, and financial markets. Prentice-Hall.