The components of the Gross Domestic Product (GDP) are the basic major forces driving the economy. This is because an increase in the amount of these components also means an increase in the GDP of a certain country. A high GDP means a high income of a country.
These are: personal consumption, investments, government spending and net exports (the value of exports minus the value of imports) (Costales, 2000). Personal consumption is the expenditures of households on basic necessities in which receipts are being issued. A no-receipt purchase or something that is not registered to the government as a business is not included, as it is a part of the black market. Investments, on the other hand are capitals that are being used in businesses. These are non-financial product purchases.
Government spending is the expenditures of the government in providing goods for the public, wages for the public workers and purchases of sectors of the government. However, it does not encompass social security or benefits. And last, is the net exports, the difference of the exports, goods produced for out of the country consumption, and imports, goods that come from other countries for consumption.
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There are also new forces driving the economy. These are breakthroughs that were discovered as time passed by and prove true to improve economic performance. Specifically, these are: technology and entrepreneurship.
Technology has now been a great help in the development of the economy because of its benefits (Henry and Cooke, n.d.). Development of new technology makes costs lower for the producers and provides means for businesses to transact among others. On the other hand, entrepreneurship is the one who thinks of innovations that may be pursued. This is because introduction of new things prove useful to both consumers and producers. They also initiate job growth as they employ employees.
Costales, A. C., A. E. Bello, M. A. O. Catelo, A. C. Cuevas, G. I. Galinato and U-P. E. Rodriguez. Economics: Principles and Applications. Quezon City: JMC Press, Inc.
“Information Technology Industries – of Growing Importance to the Economy and Jobs”. Retrieved October 25, 2007
Tesreau, K. and Gielazauskas, V. Entrepreneurship: A Driving Force in the New Economy. Retrieved October 25, 2007
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