[Music] hello everybody and welcome to this macroeconomic video on gross domestic product or GDP so what is GDP well GDP measures the output of an economy so it measures how much an economy produces and therefore we can use it to measure economic growth so if GDP increases that means the output of an economy increases is producing more so therefore economic growth has occurred because economic growth is an increase in the productivity of an economy when an economy produces more and GDP can measure two types of output we can have national GDP which measures the output of the whole economy or GDP per capita or per person this measures the output per individual of the population we also have gross national product and gross national product measures the output of a country minus all the foreign businesses with bases in that country now we use GDP to measure economic growth like I've explained because GDP measures output and economic growth is an increase in output but GDP is mainly used to keep score between countries the higher GDP you have the more almost respected you are economically and governments attempt to keep GDP positive because if GDP is positive if GDP is increasing this means the output is increasing therefore the economy is growing and that's what governments want and they also try try to keep it stable as well because if GDP is increasing at an incredibly R rapid rate it is likely this is unsustainable and will eventually crash so there is economic decline so governments try to keep GDP positive so there's economic growth and stable so it can be [Music] controlled and finally onto our bubble right at the bottom here a high GDP so a high output a high economic growth does not necessarily mean there is a high standard of living and quality of life in that country so for example just because a country is producing lots and lots and lots that doesn't mean that everybody has a good quality of life China has an incredibly High GDP because it produces a lot and it h and it is its economy is growing at an incredibly High rate but still in China 400 million people live below the poverty line and hundreds and hundreds and hundreds of thousands and millions of people live on less than $2 a day and don't have enough proper food to eat so therefore High GDP does not necessarily mean that there is a high standard of living and quality of life in that country