Gross Domestic Product (GDP)

How do we measure the health of an economy? The most common way is by looking at its gross domestic product, or GDP. But what does that mean exactly? Are there any limitations to this approach? What kind of goods are counted towards GDP? Let's dive into some specifics.
Script by Matt Beat: / iammrbeat
Animation by Ignacio Triana: / unraveled
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[@Rakunasha]

Hello Prof Dave. I work as a mess attendant at a marine base and well. I started my journey into science around 12 despite it really being about "lay level" well recently, an analytical chemist heares me speaking to a friend about atomic structure and how atoms line up to form structure like graphene or in crystals or well.. everything, really. He offered my a free tutorship for free about chemistry And I just have to say thank you to you your videos added to my tiny pool of knowledge. I am very happy to have come across your videos and learned to expand my learning in the areas.

[@studypurposeonly69]

This video deserves much more views :)

[@hebejeebies2452]

Makes sense to me . Thank you.

[@StayLuminosa]

This video saved me! Great explanation! Thank Youu!!

[@terrakorp4291]

Hi Prof Dave, thanks.... I learned a lot

[@glennpearson9348]

Wonderful explanation of GDP, in all of its various forms. One issue with GDP, at least when used to gauge the health of an economy, is that it fails to take into account what it costs to produce a finished good. This is why some economists also contrast GDP with a nation's (or a state's) debt (since people, businesses, and governments often borrow money to operate and produce finished goods). Going back to the Germany v. China example, Germany's GDP per capita is over 4 times that of China's, which suggests that at the person living in Germany is much better off than China. Moreover, at the end of 2022 Germany's national debt was around 65% of its GDP, while China's was only around 45%. Compare either of those the U.S.'s, which is around 123%. When viewed through this lens, while the U.S. may seem like the strongest economy in the world, by GDP, it's actually quite fragile given the enormous amount of borrowing we've done to produce our final goods. PS - this also explains why it seems like the U.S. is almost always facing a "debt crisis" and our rate of small business and personal bankruptcy is far higher than in most other western countries.

[@daniellewilson8527]

Thanks for this, I knew the US wasn’t doing great, had no idea how bad it was/is. I mention the US because that’s where I’m from. Changes need to be made I know

[@user-pt1kg6pk7w]

Why do you say in VietNam

[@glennpearson9348]

@@user-pt1kg6pk7w Who said Vietnam?

[@darev6780]

Thanks for this

[@zeuschronos446]

Took economics 46 yrs ago in college, didn't understand it then, still don't despite trying just seems divorced from reality. Have you heard of Kate Raworth's "Doughnut Economics" look's like not only is it easier to understand, but also more grounded in reality.

[@xXPACIFISTXx]

I am so mad lol i spend 3 hours reading about GDP and this guy basically explained it in 6minutes

[@lucidity1]

I'd like to add that the inequality also applies to the per capita and therefore may not be a perfect indicator either. if a disproportionate amount of the GDP goes to a small wealthy elite (as was mentioned) then the average citizen of a country will make significantly less then GDP per capita suggests as a result.

[@noone4735]

شكرا

[@onayeleoluwaseun]

Thank you so much 😭

[@Nikki94here]

I finally get it. Thank you :)

[@JayasriSubramanian-mq4qs]

Hi professor May i know why rewarding a super performance workers reward and air pollution affect the GDP Calculation

[@sahand944]

Helpful

[@leehayes4019]

Quality of life! Externalities! Leisure!

[@thephantomeagle2]

Thank you for this. We never get the full story from anyone official.

[@counterpoint9260]

how can ALL consumption be estimated? most videos fail to explain this..how cna a govt trck everybody's consumption an dspending?

[@phalangmiki]

00:12 GDP measures the total value of goods and services produced within a country's borders. 01:00 Differentiating between intermediate goods and final goods 01:48 GDP counts only final goods and production within a country's borders 02:31 Gross Domestic Product (GDP) represents the total cost of all goods and services produced in a country. 03:19 Real GDP is a more accurate measure of economic growth 04:10 GDP doesn’t measure underground economy, negative externalities, and leisure time. 04:58 GDP doesn’t account for distribution of goods and services 05:51 Gross domestic product (GDP) remains the primary way to quickly measure the health of an economy

[@Emankhattak-do9wl]

Thankoooo☺️

[@Musix4me-Clarinet]

Brief videos with high information density. Smart! Direct appeal to today's consumer. As an aside, there are 7 dislikes as of the time of my comment. I really can only imagine two different kinds of people who would take the time to click the dislike button: 1. _Leftovers from victims of Dave's debunking videos_ or 2. _Trolls who have nothing better in life._ In either case, *pathetic.*

[@shedshow1439]

I think number 1 definitely covers it.

[@sudipbhusal2979]

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[@akeindesilva8638]

all ways the best

[@Tabarak133]

Mr , do you have email i have homework and i need to contact with you ?

[@mikemaurer3320]

So is that with every item and food we buy from A different country. It’s Don’t t raise our gdp it raises there’s?

[@hambaallah5586]

Yes

[@Tm-bj2sq]

What if american businesses start a business offshore? Is those goods produced given the american gdp or the offshore countries gdp?

[@brasileiroloko5375]

professor dave explains psychology when

[@youtubecensorshipagainstru7799]

Why the national debt is not deducted from the Gross Domestic Product. It turns out that the statistics are not objective. It seems to show that there is production, but in fact it is in debt to the ears.

[@optimus-prime703]

When will be the next video exposing discovery institute

[@ovuakporoyeabegha9816]

So companies that produce flour, cement, bricks, electronic parts etc etc don't add the GDP?

[@RaindropWorksPDX]

I gotta disagree with the ending of your video, it's not that GDP doesn't 'prevent bias', it's that GDP has a known bias that is disregarded, whereas other options may introduce different biases that those who benefit from the bias in GDP don't like.

[@chonkycat123]

Here before this has many millions of views :)

[@REXY720]

L

[@chonkycat123]

@@REXY720did the count stop? no? then i’m not wrong

[@kingsg18]

:50 secs, Question: lets say I'm not a baker and I purchase these same items to bake a cake (not to sale). Is it now considered a final good? and how is that acknowledged in the GDP?

[@anasbendahou7722]

Yes

[@greeshmaanantharaman9742]

Sometimes GDP is expressed in percentage. How does that work?

[@melodyqueen8440]

The purpose of life is a question that has puzzled humans for centuries 🧐. Some believe it's to achieve happiness 😊, others say it's to fulfill a higher calling 🙏, while some argue that there is no purpose at all 😕. Regardless of what you believe, it's essential to find meaning in your life and strive to make a positive impact on the world 🌍. #purposeoflife #meaningoflife #happiness #highercalling #positiveimpact

[@-JA-]

👏👍

[@bobbeckstead8340]

If the government spends a lot of money, the GDP is elevated. But, the money the gov spends is other people's (tax-payers) money, borrowed money, and fiat money - i.e, it does not reflect true wealth, but it increases GDP. Gov spending also causes price inflation which renders nominal GDP less valid.

[@HakuCell]

hey Dave, can you debunk the video "THE interview" by Jeremy Griffith and his World Transformation Movement?

[@G-A-Jaxon]

GDP, the BMI of economics?

[@svenmegens]

The most accurate analogy possible

[@blazer9547]

You're right, but slightly better.

[@waelfadlallah8939]

Waiting for Don Christie

[@donchristie420]

Mowing dagnabit ☹️

[@waelfadlallah8939]

@@donchristie420 no clue what that means. Nevertheless, are you amazed by my predictability gift :)

[@donchristie420]

@@waelfadlallah8939 mowing the grass and it’s a soft cuss word that Jed clampet (Beverly hillbilly’s)used instead of godamit

[@waelfadlallah8939]

@@donchristie420 😅👍

[@waelfadlallah8939]

@@donchristie420 that was actually awkward calling for your presence but i become used to see your smart comments after every video of prof dave

[@rohanreddymogili3072]

my brain was heating up 😂

[@kksharma7638]

Can You tell me what You spoke from 4:54 to 5:06....

[@ProfessorDaveExplains]

turn on subtitles

[@kksharma7638]

@@ProfessorDaveExplains thanks

[@mohitmehta693]

😊

[@PETER7700S]

Without 1.7 TRILLION of new deficit in 2023 (7.5% of GDP) the economy of the USA shrank by 5%. 7.5%- 2.5%.

[@wendymiles3454]

Divorce leads to housing market issues

[@vijendrapillay1352]

it's mean one giant 👌👌👌

[@bobbeckstead8340]

GDP is a measure of goods & services that have been PURCHASED (not those that are available, as in inventory),, If I shine your shoes and you pay me $10, and you trim my hair and I pay you $10, that's $20 GDP even though neither of us has a net change in monetary wealth. Thus, GDP is (1) a deceptive metric, and (2) a measure of commercial ACTIVITY rather than wealth.

[@aluminumucumber4281]

financial ACTIVITY

[@donnettepalmer6798]

In my country, the government says the GDP is the best the country has seen in 20 yrs n yet we’re still struggling 😢inflation is kicking the less fortunate asses

[@ultradimensions]

So now I get how the US makes money of wars

[@hashemalawadhi9475]

My _________ enemy GDP

[@freebee007]

Religious communities relating some sounds of stars as knocking sound similar to one mentioned in Quran ch 86 Al Tariq (night star), update scientifically.

[@wendymiles3454]

Money is the most fought about topic in marriage

[@jamesnorman8848]

me early lol I know no one cares but yay

[@pranjalverma2536]

We do buddy

[@jimbo7042]

You're gay. Now I know in this day any just not a big deal but it is. Try not to be so gay

[@tshwanelomatsei4124]

We always care

[@kishwarshaheen6212]

I don't care

[@StayLuminosa]

We care 😭

[@wendymiles3454]

Its too late we already gave them the pickle

[@PieInTheSky9]

Wow I'm early

[@rsgh9284]

First

[@QuethLevi]

horrible audio levels

[@toby9999]

Sounds fine to me

[@tireroastersgarage]

Your channel went down hill big time eh.

[@ProfessorDaveExplains]

Um, no.

[@ProfessorDaveExplains]

@@dylbough My academic tutorials have never, ever gotten more than a few thousand views on the day of release. They used to get only a few hundred. You just have no clue how educational channels work and you're also a whiny little bitch. Work on that.

[@ProfessorDaveExplains]

@@dylbough It does not "work like every other KZbin channel". You're just a clueless moron. Do me a favor, head over to Khan Academy. How many subscribers? What's their average view count the day of posting a video? Students watch my tutorials when they need to for class, not arbitrarily the day I post it for entertainment. Now do you understand? Do you see how you're a clueless whiny bitch with no clue what they're talking about, and by continuing to act like a smug douchebag you are actually humiliating yourself? Yeah?

[@nickm1212]

​@@ProfessorDaveExplains ah yes, the ever effective teaching technique of "you little whiny bitch". Don't have kids man, you'll crack if you haven't already.

[@mimisbrunnr9956]

​@@ProfessorDaveExplainsJust ignore the guy. He is doing it for attention, a reaction, or just to be a dick. Great job, as always.

[@rama7267]

You got absolutely toren apart by Dr. James Tour he debunked your nonsense about the origin of life

[@ProfessorDaveExplains]

No, he didn’t. I debunked him. If you had the courage to watch my content, you’d know that.