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Gross Domestic Product

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Ariel Piccini, Ettore Brandi, Gioele Marsili e Enea Zoccolanti

Gross Domestic Product is the market value of all finished goods and services produced whitin a country in a year.The GDP calculation includes all public and private consumption, investment, public expenditure, private stocks, construction costs already settled and the foreign trade balance. The concept of GDP similar to the present was fully expressed by the economist Adam Smith in his most famous work The Wealth of Nations. He believes that capital can be of two kinds: circulating and fixed. Circulating capital is characterized by the fact that it generates a profit for those who own it only when the owner himself sells it and then separates from it. Fixed capital, on the other hand, simply generates profit from its possession.

What is the Gdp?

Are durable goods that are used in the production of goods and service. Are typically used business to produce other goods

  • Capital goods

Refer and are ready to be sold to customer on used by consumer.

  • Finished goods

Producer goods, also known as intermediate goods, are materials, components or production used by business in the production of other goods or services.

  • Producer goods


There are several types of goods:

Non-market assets: GDP usually excludes assets that do not involve monetary transactions on the market. This includes domestic work, voluntary work and illegal activities such as black market transactions.Intermediate goods: GDP includes only the value of the final goods and services produced. Second-hand sales: GDP includes only the value of newly produced goods and services. Transactions involving used goods are not counted in GDP.Unreported economic activity: Some economic activities may not be reported or occur in the informal economy, such as "over the counter" payments or unregistered enterprises.Environmental and social factors: GDP does not take into account environmental degradation or social factors such as income inequality, health, education and quality of life

What is not include in the Gdp?

Real living standards have increased 4.5 times, and this is reflected in the much greater choice of consumer goods that we can enjoy in 2022. In just 15 years from 1950 to 1965, real incomes rose 40%.However, since 2009, the post-war economic boom looks like a different era, with economic growth per capita starting to stagnate and only seing marginal increases in living standards. The arrival of rising energy prices and unexpectedly high inflation, risk pushing the UK in to a new ‘winter of discontent’.

How are we going to evaluate?