GDP Data Activity

GDP Data Exploration
Part 1: Review
Use the notes you took over GDP to answer the following questions.
1. What is GDP?
2. What are the four components of GDP?
3. Using GDP, how can economists know if the economy is growing? What phase of the
Business Cycle would we be in if we were growing?
4. Using GDP, how can economists know if the economy is in a recession? What phase of the
Business Cycle would we be in if that were happening?
Part 2: Application
Use the document located here to answer the following questions.
5. Look on page 1. What is the most recent estimate for annual GDP growth in the second
quarter?
a. Is this change positive or negative?
b. Does that indicate that GDP is increasing or decreasing?
c. Which phase of the business cycle is the US currently in?
6. Look on page 4. Which industry saw the highest growth since Second Quarter (April–June)
of 2020? Which industry saw the lowest?
7. Why do you think the “Accommodations and food services” industry saw so much growth?
“Accommodations” would be things like hotels, Airbnb’s, vacation rentals, etc.
8. Look on page 11. Look in column 14, titled “Billions of chained (2012) dollars, Seasonally
adjusted at annual rates, 2021, Q2”. Provide the following information:
a. Billions of dollars on Personal consumption expenditure:
b. Billions of dollars on Gross private domestic investment:
c. Billions of dollars on Net exports of goods and services:
d. Billions of dollars on Government consumption expenditures and gross investment:
e. By adding those values up, you get the total for real GDP (in billions of dollars):
9. Are any of the values you looked up in number 8 negative? If so, which one? What does that
negative value mean? Do you think it’s a good or bad thing? Explain.
Part 3: Evaluation
Watch this video and answer the questions that follow.
10. According to “Simon Kuznets,” what are some of the things that GDP doesn’t account for?
Do you believe those things are important?
11. According to “M. Joseph Meehan,” why are those intangible things—like smiles—not
calculated as part of GDP? Do you think this means we shouldn’t try to calculate them?
Read this speech by former President Dwight Eisenhower and answer the questions that follow.
“Every gun that is made, every warship launched, every rocket fired signifies, in
the final sense, a theft from those who hunger and are not fed, those who are cold
and are not clothed. This world in arms is not spending money alone. It is
spending the sweat of its laborers, the genius of its scientists, the hopes of its
children. The cost of one modern heavy bomber is this: a modern brick school in
more than 30 cities. It is two electric power plants, each serving a town of 60,000
population. It is two fine, fully equipped hospitals. It is some fifty miles of
concrete pavement. We pay for a single fighter plane with a half million bushels
of wheat. We pay for a single destroyer with new homes that could have housed
more than 8,000 people. This is, I repeat, the best way of life to be found on the
road the world has been taking. This is not a way of life at all, in any true sense.
Under the cloud of threatening war, it is humanity hanging from a cross of iron.
[…] Is there no other way the world may live?”
—Dwight David Eisenhower,

“The Chance for Peace,” speech given to the American Society of Newspaper Editors, Apr.
16, 1953.
12. If a country is preparing for war by building warships, rockets, bombers, etc., what is
happening to its GDP?
13. If a country is building schools, hospitals, and other implements of peace, what is happening
to its GDP?
14. Which type of country would you prefer to live in? Why?
15. Look back at your notes from Unit 2, the Social Goals of Economics. List each of the goals
below.
a.
16. Which 3 goals do you think GDP would be a good measurement for. List the goals below,
and explain why you think GDP would be useful to help measure that goal.
a.
b.
c.
17. Consider the following information about two countries:

Real GDP
Country A $1,032 billion
Country B $588.5 billion
Based only on the information above, which country do you think would be the better
country to live in? Why?
Use the linked document, located here, to complete the following chart. You will need to look at
several different tables. The list goes in order of the tables in the document (except for GDP per
capita—just use your calculator)
18. Country A is Nigeria, and Country B is Switzerland. Compare the 2 countries on the
following measurements using the document from above:
Nigeria Switzerland
Population
Real GDP per Capita ($USD)
[divide Real GDP by
population]
Median age (in years)
Total fertility rate
(births per woman)
Child malnutrition
(% under age 5)
Under-five mortality rate
(per 1,000 live births)
Healthy life expectancy at
birth (years)
Secondary education (high
school) enrollment ratio
(% of secondary-age
population)
Government expenditure on
education (% of GDP)
Total unemployment
(% of labor force)
Homicide rate
(per 100,000 people)
Suicide rate—Female
Suicide rate—Male
Total Internet users
(% of population)
Mobile phone subscriptions
(per 100 people)
19. Evaluate the following statement as being either true or false: “Real GDP is the best tool for
measuring how a country is doing. Countries with higher real GDP are doing better
than countries with lower real GDP.”
20. Based on the information above, explain which country you would prefer to live in, and why.
This answer should be at least 1–2 paragraphs, and should include references to specific
data that you just collected.

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GDP Data Exploration

2. What are the four components of GDP?

—Dwight David Eisenhower,

17. Consider the following information about two countries:

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