What does real GDP growth mean for you and me?
Real GDP is a form of the Gross Domestic Product, the value of the amount of goods and services produced in a year for a nation, that is adjusted according to inflation. Inflation is when there is an decrease in the value of the dollar, thus, the percent growth of nominal GDP minus the percent of inflation is your real GDP. This concept applies to the average citizen because the amount one can consume is confounded by what they produce. Meaning, I am not able to buy or use more than I can produce.
FIRST POST DID NOT CONNECT. THIS IS A COPY PASTE!
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GDP for everyday civilians tells us how much income we have. This relates to how much we are able to spend, which is dependent on GDP, what we produce. Thus, backing up the statement, "what we can consume is constrained by what we can produce." (Wheelan)
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GDP for everyday civilians tells us how much income we have. This relates to how much we are able to spend, which is dependent on GDP, what we produce. Thus, backing up the statement, "what we can consume is constrained by what we can produce." (Wheelan)
You have a reasonable understanding of real GDP but did not address much of what Whelan discussed in the assigned chapter.
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