Note: This is post #70 in a weekly video series on basic economics.
GDP is the market value of all finished goods and services, produced within a country in a year. But what does “market value” mean? And what defines a “finished good”?
In this video, Marginal Revolution University helps us make sense of this important economic indicator by explaining how GDP is computed. You’ll learn why the eggs in your homemade omelet part of the GDP, but the eggs your baker uses are not, as well as why a bottle of French wine contributes to France’s GDP, even if you bought it in the United States.
(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)
Click here to see other videos in the Introduction to Economics series.