Gross Domestic Product Difference between Nominal and Real GDP Business Cycle Macroeconomic concerns Circular flow diagram Definition of GDP Measurement of GDP Measuring GDP using expenditure approach COMPONENTS OF GDP Personal consumption expenditures (C) 10,100 Gross private domestic investment (1) 1,600 Government consumption and gross investment (G) ? Net exports (EX - IM) 300 Durable goods 1,000 Nondurable goods ? Services 6,800 Nonresidential 1,300 Residential ? Change in business inventories -100 Federal 1,100 State and local 1,700 Exports (EX) 1,900 Imports (IM) Gross domestic product