In a closed economy, goods and services are exchanged in product markets and factors of production are exchanged in factor markets. In this video, we explore how to model this in a straightforward way using the circular flow model. Created by Sal Khan.

When using the expenditures approach to calculating GDP the components are consumption, investment, government spending, exports, and imports. In this video, we explore these components in more detail. Created by Sal Khan.

Thinking about how different types of expenditures would be accounted for in GDP. Created by Sal Khan.

In this video, we explore how purchases of different things affect GDP, or why they wouldn't!

In this video we explore an alternative method of calculating GDP: the income approach. The intuition behind the income approach is pretty straightforward because every time you spend money, that spending is someone else's income. Learn more about the income approach and its categories: wages, interest, rent, and profit. Created by Sal Khan.

What an economist means when they say "investment" is different than what most people mean when they use it in day-to-day conversation. In this video, take a deeper dive into the investment category of real GDP. Created by Sal Khan.

GDP is the most commonly used measure of output, but it leaves some things out. Learn about the limitations of GDP in this video.

If you make some cloth and someone uses that cloth to produce something else, how does that show up in the calculation of GDP? In this video, learn how GDP deals with intermediate goods. Created by Sal Khan.

In this video, we break down GDP into its components to better understand what's counted in GDP and what's not counted. Created by Sal Khan.

Principles of Macroeconomics 2e covers the scope and sequence of most introductory economics courses. The text includes many current examples, which are handled in a politically equitable way. The outcome is a balanced approach to the theory and application of economics concepts. The second edition has been thoroughly revised to increase clarity, update data and current event impacts, and incorporate the feedback from many reviewers and adopters.Changes made in Principles of Macroeconomics 2e are described in the preface and the transition guide to help instructors transition to the second edition.

By the end of this section, you will be able to:Contrast traditional economies, command economies, and market economiesExplain gross domestic product (GDP)Assess the importance and effects of globalization

In this video, we learn how a nation's GDP can be calculated by summing up the value added by all the intermediate producers in a nation in a method called the value added approach.