GDP: ONE OF THE GREAT

INVENTIONS OF THE 20TH CENTURY

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AUBREY DIAN AGUSTINE
F I T R I D E V I TA
IMAM BUANA

K A R I N A P E R M ATA S A R I
MOCHAMAD RIZKY AULIA
N A J AT U S S A A D A H

HISTORY OF GDP
In 1930s BEA (Bureau of Economic Analysis) develop a set
of economic account, but the compressive of national
income and output did not exist at the time.
In the past decade, the accounts have been updated by
introducing measures of real output and prices that reflect
current expenditure patterns.

INVENTION OF GDP
GDP as the great inventions of the 20th century because it
show the policymakers, business, and households to see
where the economy has been and where it might be
headed, so all can make better informed decisions on what
course of action they should take.
Developed estimates of investments in computer software,
and incorporated updated measures of high tech products
and banking output.

GROSS DOMESTIC PRODUCT (GDP)

GDP is the total market value of a countrys output. It is the market
value of all final goods and services produced within a given period
of time by factors of production location within a country.
GDP is the value of output produced by factors of production
located within a country.
GDP = Final sales + Change in business inventory.
GDP can be computed two ways :
- Expenditure approach:
Measures the total amount spent on final goods and services.

- Income approach:
Measures the income receive by all factors of production in producing final goods
and services.

SOLUTION
The needs of the information age will only get larger, then BEA,
BEC, and others statistical system must take a strong leadership
role in the harmonization of economic and financial standards
Continue their work with business and government to increase
the use of electronic data collections and administrative records.
This will require the adoption of common product and industry
codes, the sharing of data between statistical agencies, strong
assurances of confidentiality, improvements in administrative
records, and an information technology system in the U.S.
statistical agencies.

Q&A
Q: What is the most important the usage of GDP as
Macroeconomics analysis business practitioners in
private sector?
A: GDP can be called as health indicator of countrys economy. A
significant change in GDP will affect on the stock market, a bad
economy usually means lower stock prices. While a business
practitioners have their investors to be concerned to, they need GDP
to show the economic situation, because investors really worry
about the negative GDP growth.

Q: Is there any correlation between GDP and high or

low amount of Underground Economy transaction?
A: No. Underground Economy is not measured in GDP. GDP only
measure products that is reported, while most of Underground
Economy is illegal, the practitioners will not report the product
because they wish to avoid tax.