>> Before we can talk about what
makes gross domestic product go

up or go down we need
to know what's in GDP,

what's not in GDP, and how

to categorize the different
types of production.

A bike produced in this
country this year counts

in this year's GDP.

A used bike doesn't
count in GDP this year,

even if I buy it
second hand this year.

I hire a neighborhood kid

to shovel my driveway
counts in GDP.

If I make my kid
shovel the driveway

without paying them it
doesn't count in GDP

because no money changed hands.

A restaurant dinner produced

and purchased this
year counts in GDP.

A chicken that that
restaurant buys

from a poultry farm
doesn't count in GDP

because it's not a finished
good, it's an intermediate good.

Then you need to know the
GDP categories; consumption,

investment, government
purchases, and net exports.

Everyone thinks that
different types of products go

into the different categories

but really the most important
thing is not what the product is

but who buys it.

If a computer is bought by
a regular person for use

at home it's counted
as consumption.

If that same computer was
bought by a business to put

in an office it would be
counted as investment.

If that same computer was
bought by a government agency

or a public school
it would be counted

as a government purchase.

If that same computer was sold
to China then it would count

as a positive in net exports,
whereas if we bought it

from China it would count as
a negative in net exports.

So here is your GDP checklist.

First, was it produced
this year?

Second, was it bought for money?

Third, is it a final good?

And fourth, who bought it?