Analyzing US GDP Jackson Demetria University Maryland University College Abstract After viewing the different Gross Domestic purchases over the past 10 years, I have found that GDP deflator can be viewed as a measure of general inflation in the domestic economy. Inflation can be labeled as a measure of price changes over time. The deflator is usually expressed in terms of an index, a time series of index numbers. For example, percentage changes on the previous years are also shown below.

The GDP deflator reflects movements of hundreds of separate deflators for the individual expenditure components of GDP. These components include expenditure on such items as bread, investment in computers, imports of aircraft, and exports of consultancy services. A deflator is a value that allows data to be measured over time in terms of some base periods, usually through a price in a deflator serves as a price index in which the effects of inflation are nulled. It is the difference between real and nominal GDP.

In the United States, the import and export price guides the produced International Price Program that is used as deflators in national accounts. For example, the gross domestic product (GDP) equals consumption expenditures plus net investment plus government expenditures plus exports minus imports. Various price indexes are used to “deflate” each component of the GDP to make the GDP figures comparable over time. Import price indexes are used to deflate the import component and the export price indexes are used to deflate the export component.

Nominal GDP is the value of production at current market prices, here measured in millions of US dollars. I have found that the Fed launch on the latest brilliant idea, to target nominal GDP, it will most likely blow up everything, as the US economy is now about 14. 7% below the trend line average. Which means 8. 6% annualized increase in economic growth, which is about double where growth has been in the past. How this is possible you may ask? The absentness of the issuance f an incremental ~10% in annual debt each year, keep in mind we are dealing with Keynesians, where debt = growth so we don’t know how it will end exactly. Neither does the Fed. So if indeed the Fed wants to revert to trend line, that means by my research by 2016, US Debt will be greater by an additional $10 trillion over an on top of the $10 trillion increase already forecast by the GAO over the next decade, or, numerically, by 2021, the US would have about $35 trillion in debt, and most likely, well over that amount.

This is very depressing. In addition, Real GDP is the value of production using a given base. It is an inflation-adjusted measure that reflects the value of all goods and services produced in a given year, It has often been viewed to as “constant-price”, “inflation-corrected” GDP or “constant dollar GDP”. The real GDP graph bellows expresses the growth rate of the US and how it shows over a time period of fluctuation.

With all my research and examining of GDP over the past 10 years, including real GDP, nominal GDP, and the GDP deflator I have been able to see what exactly the USA have been experiencing. It has enlightened me on the stocks and the market at this time and leaves me wanting to earn more and more about the economic world I live in. Citation Louis Johnston and Samuel H. Williamson, “What Was the U. S. GDP Then? ” MeasuringWorth, 2011. URL: http://www. measuringworth. org/usgdp/