Final answer:
GDP measures the total dollar value of all goods and services produced in a country and includes four components: consumption, business investment, government spending, and net exports. Transactions within these categories contribute to GDP, and tables that count GDP present the compilation of these economic activities.
Step-by-step explanation:
The Gross Domestic Product (GDP) is a measure of the economic activity within a country and represents the total dollar value of all goods and services produced over a specific time period. The components of GDP can be categorized into four main parts: consumption, business investment, government spending on goods and services, and net exports. Each of these components reflects different types of spending in the economy, and transactions within these categories contribute to the calculation of GDP. Consumption includes personal expenditures on goods and services, business investment refers to spending on capital goods and inventory changes, government spending encompasses purchases made by the government, and net exports represent the difference between what a country exports and what it imports.
When assessing transactions and their impact on GDP, it is essential to determine which of these four components the transaction falls under. For instance, if a family buys a domestically-produced refrigerator, this transaction would count under consumption. A company purchasing machinery would add to the business investment component. Government expenditures, such as spending on infrastructure, would count as government spending, while the sale of goods to another country would contribute to net exports. Collectively, these transactions are compiled and presented in tables such as Table 5.3, Table 19.3, and Table 6.3 'Counting GDP' to give a full picture of a country's economic output.