Components of GDP | GDP: Measuring national income | Macroeconomics | Khan Academy

Must be using the Greek letter Γάμμα ‘Gamma’ (for GDP), Γ which is anglicised to Y.

y means the yield of the country

Questions
Expenditure done by govt giving salary to its employees are considered two times by the equation.
Government gives money to employees that employees is using that money to invest and consume.
How's that?

I find thinking about "final" goods and services tricky. A country could import crude oil and refine it locally, then sell it as gasoline (and jet fuel, lubricants etc). Crude is not a final product, but gasoline (etc) is. Likewise, a country could import coal or gas to burn locally for electricity. The electricity is the final product for consumers, but it is an input for companies (who need it to make their final products).

I thought the “Y” stands for ”income”

Real good stuff here

How does GDP account for a Commodity or Stock trader selling and buying a stock several times in a day? Do all the transactions of the day add up to register as GDP produced on that day ?

Omg thank you!

sal u make it so easy to understand things man

is it just me thinking the guy who speaks exactly sound like ted mosby when he is telling the story to his kids?

im feeling watching this, that I waste a lot of time at school.............

Why is buying a new house from household spending considered an investment?

Doesn't newly constructed houses belong to the gross private domestic investment(private sector/firms) and not to the personal consumption expenditures(household)?

"I don't know why, but the symbol is Y."

I see what you did there! 😜

I think the consumer of household also include the investment of firm, because it is included in the final price. Therefore the GDP is double included the investment fee of firm. Can anyone explain for me?

Is gdp a best measure for calculating national income???

If one defines "investment", contrary to basic human logics, as "expenditures of firms", then why does one not call it "expenditure of firms"?

I mean, there must be a reason.

But "sold" is not the same as "produced".
So shouldn't there by an element of change of stocks?

Greatly explained,,but i have a confusion,how do u come to know about the expenditure of household.I mean do we ask each household how much is your monthly expenditure or is there any other way of doing it???...Plzzz Help N plz respond........

But what if there are some goods produced by firms that haven’t been sold in the economy? Do those goods get accounted in the GDP too?

Hi

So in 6 years, no one explained that Y means "yield"? Can I have a job at Khan Academy? lol

Sal Khan, you are the best. Thank you for all the great training videos!

Liked the explanation. Thanks!

Like..

Thanks, we understand this. I am thankful for this video.

This guy repeats himself over and over until he finally writes it down. It's infuriating. Very knowledgeable, but very annoying.

I love this organization thank you

+Sebastian G GDP calculations exclude second-hand sales to avoid double counting.

Write it clear!!

Well I've been studying a lot for the past months using your website and I'm on my way to an entrance exam and watching this video on the train. I wanna thank you for all your videos and the knowledge you share!

how we can increase the sales

thank you so much!! You are a life saver. All the best for you man!

Do tourists come under the household category?

I dont know  why and the symbol is Y!. lol

That would be the 'Value Added' i guess.

@Sues.. don't include Government? well, i take it you are using a Classical Approach rationale that government takes away from the productive private sector. But as an illustration in most recent crisis and use a little logic. Corps healthy and sitting huge pile of cash. Should they spend on PPE or salaries if "C" isn't buying. (and C is 2/3 of GDP) So what do they do to the cash? They issue bonds at record low and buy back own stock at record lows... impact on GDP and jobs? zip

cont: in Keynesian econ, this would be putting brakes on the economy if overheated and part of fiscal policy. @kyle your econ class used (G-T) to account for taxes? ok, not sure the lesson was grasped, unless prof was trying to illustrate another point...no clue what. G-T implies Gov't spending minus taxes. It simply reduces the disposable income but it's is still only EXPENDITURE that counts. $100 salary less $20 in taxes=$80--he spends all. C=80 Government spends all tax...G=20. GDP 100

A few mixups between income and exp approaches in comments below. @marc If gov pays the salary then it is considered "g". @userlous : it only counts as "c" because it is the consumer "expending". If GM invested in Property/Plant equip then it would be I. @menogoth no: high taxes and spends nothing would not is not necessarily equally prosperous, depends on other components...high taxes reduces "c" because it lowers disposable income, and if govn't doesn't spend...Then G is not impacted..

Wages of a policemen are not considered G because they will be added into C. So you failed...

What if someone bought some air for a million dollars? Would that add a million dollars to GDP?

Sorry one last question. If GM sells a car for 1000 dollars then the second hand shop sells it for 1500? would GDP count the 500 as a service so the total gdp would be 1500? Thanks ;)

Please underline exactly how government expenditure is "useless" at improving the lives of consumers. Correct me if I'm wrong, but isn't that EXACTLY what government expenditure is ultimately for albeit in the short or long term.

So by your logic a country with a government that levies high taxes and spends little to nothing, should be equally as prosperous as one that spends most of what it takes in.

this helped a lot thanks

Including government expenditures in GDP is retarded if you are looking for a metric that denotes how prosperous and productive a country is. Because none of the money it spends comes from the market, and because all of things it buys are useless as far as improving the lives of consumers are concerned, it creates a false sense of prosperity to include government spending in metrics that supposedly provide a measure of prosperity.

@khanacademy plaese add these microeconomic playlists to your website , thank you

Help me!!!!!! My cat wont leave me alone!!

Thank you