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  Chapter Fourteen:

  Gross Domestic Product
  Business Cycles
  Business Revenues
  Trading Volume
  Dow Jones Average
  Crude Oil
  Energy Consumption
  Imports and Exports
  Foreign Investment



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Gross Domestic Product

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The Gross Domestic Product per capita, in constant dollars, grew eightfold during the century.

The Gross Domestic Product attempts to measure the entire output of the American economy that is traded in the marketplace: every computer, every haircut, every car, every college course taken by a student, and so forth. The “real” GDP is the GDP adjusted for changes in prices. When the real GDP is divided by the number of people in the U.S. population, an approximate measure of the nation’s standard of living is obtained. The United States enjoyed phenomenal economic growth in the twentieth century. The GDP per capita increased in every decade of the century. Even during the decade of the Depression, 1929–1939, the per capita GDP actually increased 2 percent, overcoming a sharp drop in the early years of the decade. 

The extraordinary growth in GDP per capita was caused primarily by growth in inputs to the economy: more energy, more capital, better-educated workers, and research and development that produced better technologies. Some of the growth can also be traced to improved organization of productive activities.

Chapter 14 chart 1

Source Notes
Source Abbreviations

HS series A 23 and F 2, and Brent R. Moulton, “Improved Estimates of the National Income and Products Accounts for 1929–99: Results of the Comprehensive Revision,” Survey of Current Business (April 2000), at the Bureau of Economic Analysis web site, (accessed April 2000). GDP for 1999 is from the same web site (accessed May 20, 2000). From 1900 to 1928, the data are based on retrospective estimates and are actually Gross National Product (GNP), not GDP. For our purposes, there is little difference between GNP and GDP during that period.


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