Data exercise

Data Exercise Name Institution Course Name & Course Number Instructor Due Date Data Exercise Expenditures Approach to Calculating GDP To an extent, the gross domestic product (GDP) of a country can be understood by reviewing the expenditures. GDP can either be nominal or real. Nominal GDP captures current market prices while the real GDP captures the value after accounting for the inflation (Feldstein, 2017). Thus, as shown in Table 1 below, nominal GDP of the United States in the most recent quarter is higher at $29,349.9 billion than the real GDP is $23,386.2 billion. The difference of $5,963.7 billion between real and nominal GDP reflects the difference in value due to inflationary effects. Table 1 GDP and its components (BEA, 2024) LINK Excel.Sheet.12 "C:\\Users\\user\\Desktop\\Excel worksheet.xlsx" Sheet1!R1C1:R7C5 \a \f 5 \h \* MERGEFORMAT GDP and its Components (in billions of dollars) Nominal % of GDP Real % of GDP Gross Domestic Product 29349.9 100% 23386.2 100% Personal consumption expenditure 19935.2 68% 16111.7 69% Gross private domestic investment 5330.1 18% 4373 19% Net export of goods and services -950.2 -3% -1077.1 -5% Government consumption expenditure and gross investment 5035.1 17% 3965.5 17% As shown in table 1, personal consumption expenditure makes up the largest portion, accounting for 68% of nominal GDP and 69% of real GDP. The high percentage reflects the pivotal role of household spending in driving economic growth. Gross private domestic investment, comprising 18% of nominal GDP and 19% of real GDP, represents businesses’ expenditure on capital goods and changes in inventories. The category is the second largest and it measures economic activity related to expanding productive capacity, signaling business confidence and potential future growth. Comparatively, net exports of goods and services make up the smallest share of GDP at -3% nominal and -5% real. Net exports of goods and services contributes -$950.2 billion in nominal terms and -$1,077.1 billion in real terms, as captured in table 1. The deficit reveals that United States imported more than it exported in the most recent quarter. While the negative figure is common in some developed economies, it suggests challenges in trade balance and reliance on foreign products. Within government consumption expenditure and gross investment, which amounts to $5,035.1 billion nominally and $3,965.5 billion in real terms, national defense accounts for $1,091.9 billion nominally and $867.5 billion in real terms. National defense thus comprises 21.7% of government expenditures in nominal terms and 21.9% in real terms. The percentage emphasize the substantial allocation of resources to defense within the broader context of government spending. Analyzing the data offers insights int...