Please help? GDP/interest rates question!!?

Question

What is GDP intended to measure and what are some things that aren't included in that measurement?

Also, how can the federal government change interest rates?

Answer 1

GDP = Adding up total expenditures. (Consumption goods and services + Investments + Government Purchases + Exports - Imports).

GDP is designed to measure the market value of production that flows through the economy.

The Federal Government does not change interest rates. Monetary policy is administered by the Reserve Bank of Australia.

Answer 2

GDP = Consumptions + Investments + Government expenditures

           + (Exports - Imports)

GDP intended to measure a country's national income..

GDP measured all of the components above within a country, regardless of people/company's nationality.. GDP's China also calculates revenues from Multinational Company such as IBM, Microsoft, Chevron, and all foreigners that established and works within the country...

However, GDP is not calculating income from its citizen who works outside the country...hence, a Chinese who works in US, his income is not included in China's GDP...

GDP can be contrasted with GNP. Regardless of the region, GNP measures the value of output produced by its nationality..

Recently, GDP has been criticized as the cause of the global warming..GDP doesn't measure externalities--there's no cost of environmental damage in GDP components. and because it is widely used, countries don't have incentives to environmental effects of its development...

Other things that GDP does not measure is wealth distribution (resulting income inequality), voluntary work, black market, sustainability of growth..

They change interest rates by open market operations, which is buying and selling treasury securities. By selling T-notes, they supply dollars to the market, increasing money supply, hence, interest rate will fall down...