# How to Calculate GDP

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GDP 1. The basic formula for calculating GDP is Y = C + I + E + G Y = C + I + E + G where Y = GDP C = Consumer Spending I = Investment made by industry E = Excess of Exports over Imports G = Government Spending Thus, GDP = 1000 + 300 + 150 + 200 = \$1650 2. If more energy was produced domestically, this would increase the GDP. The imports would be reduced, leading to an improved (X-M) figure. In addition, I would also increase in order to extract that energy. Both of these functions serve to increase the GDP. We are swapping wealth from another country for wealth from our country, hence GDP would improve. Inflation 1. The inflation rate would be as follows: (104-100) / 100 = 4% 2. The inflation rate would be as follows: (234-231)/ 231 = 1.3% These figures are based on the basic formula of : (new CPI old CPI) / (old CPI) Unemployment 1. The method of calculating the unemployment rate is INCLUDEPICTURE "http://media.wiley.com/Lux/40/9640.nce008.jpg" * MERGEFORMATINET source: Cliff Notes The unemployment rate would be as follows: 2000 / 20,000 = 10% 2. People who are no longer looking for work are not counted in unemployment statistics, so the unemployment rate is calculated as follows: (2000 500) / 20,000 = 7.5% International The following charts highlight the economic data of the US, Japan, Canada and the UK over the 2008-2011 period, illustrating the change in the different economic measures, from the St. Louis Fed International Trends Publication,