YouTube Transcript:
What is gross domestic product (GDP)? | News glossary

when trying to get a sense of how rich a
country is the most common term you'll
hear is gdp or gdp gdp gdp is gdp gdp or
gross domestic product uh while many
internationally consider australia's
main gross domestic product to be
vegemite uh the gdp is actually the
market value of all finished goods and
services produced in a country in a year
obviously that is total gibberish but uh
here's what it means
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let's take australia our gdp is the
number we get when we add up the price
of every single product or service
produced in our country
when it reaches the point where it's
sold for the last time in australia
for example let's say your job is to
make sugar and a third of the sugar you
make you take to the local market and
you sell it in little bags for people to
use in their household cooking the sale
of that sugar would count towards
australia's gdp but another third of the
sugar you make you actually sell to a
local sweets company that uses it to
make lollipops that they will eventually
go on to sell
the sale of that sugar would not add to
the gdp because it's not a finished good
but eventually the sale of the lollipops
would you see in this way we don't end
up with a bunch of double ups
the only time the sale of unfinished
goods or intermediate goods count
towards the gdp is when they're being
exported uh which is what you do with
that last third of sugar you sell it to
a company in japan and
it doesn't really matter what that
japanese company does with it because
that's the last time that sugar will be
sold in australia oh and it's not just
the sale of physical objects by the way
like the money that doctors make or dog
walkers make or teachers or babysitters
all of that counts towards the gdp too
because they're selling a service to put
it simply gdp gives you a sense of how
big a country's economy is
it's not perfect though because there
are heaps of things that can't be
measured that still affect the wealth of
a country like having non-polluted air
or clean drinking water or a bunch of
tourist attractions or even just the
happiness of the citizens all these
things are super valuable but hard to
put a dollar value on economics bad at
measuring things other than money
shocking where gdp does come in handy
though is comparing countries and it's a
pretty decent way of seeing who the most
powerful players are in the global arena
for example as of 2022 the us's gdp is
20.94 trillion us dollars compared to
australia's
1.33 trillion
give or take as the exchange rate
changes with every second but um clearly
they dwarf us
what if you wanted to compare how well
off each of our citizens are well then
you would need to divide the gdp by the
population giving you the gdp per capita
in the u.s the gdp per capita is about
63.5
000 us dollars while in australia it's
about 51.8 000 so as you can see much
much closer oh while i have you here the
growth rate of a country's gdp is
another big thing that people talk about
because it's a common way of determining
the relative health of a country's
economy uh particularly when that growth
is actually
negative anyway that's gross domestic
product
gross