If you throw all the products we buy and the services we use in one basket, then add up the price tag, that's the Gross Domestic Product, which is the primary metric economists use to assess the economic health of a country or region.

The easy part of calculating GDP is the calculation itself: C+I+G+(X-M)=GDP. Got it? No? Well, add Consumption, Investment by companies, Government purchases, and then take the product of eXports (calling it 'E' would lack sexiness) minus iMports ('I' was taken). Viola! GDP.

Still don't get it? Well, knowing the components helps. Consumption is the biggest component, and it's a tally of the cost of all the goods and services we buy. Investment is what companies spend on the real assets they own, plus the value of the inventory that we haven't gobbled up through consumption. Government purchases are what the Feds pay money for (whether it be highways or fighter jets, though big social programs, like welfare, aren't counted). And then we calculate the difference between the goods and services we¿re sending to other countries and the stuff we're bringing in.

Good. That explains it, except there's a catch. Inflation has a habit of distorting the numbers, so economists talk about either Nominal GDP or Real GDP. In fact, Real GDP isn't necessarily "real" for most folks, since it takes any inflation out. Nominal GDP includes the effects of inflation. (There's something called the implicit price deflator which is a calculation using the two, but we'll spare you the details.)

So, now that we know GDP, why do we want to? Well, it's good to compare different markets. And watching the trend shows whether a given economy is growing (good), stagnating (not so good), or shrinking (very not so good). When GDP goes down two quarters in a row, we're officially in a recession.

For the record, GDP is released at the end of each month, with most reporting ¿preliminary¿ data for the previous month. But you won't get final GDP numbers for the fourth quarter of a year until the very end of the first quarter of the next year. After all, it's not an easy number to calculate.

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Monday, June 30, 2008

Foundation for Investor Education Invests in Students' Success by Joining Digital Arts Alliance

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SAN ANTONIO, June 30, 2008 /PRNewswire-FirstCall via COMTEX/ ----The Foundation for Investor Education, publishers of The Stock Market Game, is joining the Digital Arts Alliance, which promotes digital arts in K-12 education through fully funded and staffed programs delivered directly to schools and community centers nationwide.

The announcement was made today at the National Educational Computing Conference (NECC) by the Pearson Foundation, the founding partner in the Digital Arts Alliance.

The Foundation for Investor Education is a New York-based non-profit organization that advocates investor education in the U.S. and publishes the Stock Market Game, a live, online trading simulation and the only one of its kind supported by the New York Stock Exchange. The Pearson Foundation is working with exemplary Stock Market Game instructors and their students to create digital arts presentations showcasing their work with the game.

The Stock Market Game encourages students to learn skills by maintaining a virtual stock portfolio of $100,000. It provides teachers with an effective instructional tool for bringing authentic, project-based learning into the classroom tied to financial literacy. Combining important lifelong learning skills, such as critical thinking, decision-making, cooperation, and communication, the Stock Market Game engages students with real world learning opportunities and helps prepare them to be informed and engaged citizens.

"The Stock Market Game enlivens core academic subjects, including math, social studies, and language arts," said Kathy Floyd, Executive Director of the Stock Market Game. "And research has shown there's no better way to learn the importance of saving and investing."

"We are working together to make digital arts a key component of the already highly successful Stock Market Game," said Mark Nieker, president, The Pearson Foundation. "To help schools create more effective educational tools for both teachers and students."

The Foundation for Financial Education joins other Digital Arts Alliance members, including Nokia, Adobe, The National Academy Foundation, the American Red Cross, and the NEA Foundation in supporting an extended network of teachers and students who take advantage of Digital Arts Alliance student and educator residency programs to develop proficiencies in core subject knowledge and other 21st Century skills.

About The Foundation for Investor Education

The Foundation for Investor Education, an affiliate of the Securities Industry and Financial Markets Association (SIFMA), is a charitable, educational not-for-profit (501-c-3) organization dedicated to advocating investor education in the U.S. SIFMA brings together the shared interests of more than 650 securities firms, banks and asset managers. SIFMA's mission is to promote policies and practices that work to expand and perfect markets, foster the development of new products and services and create efficiencies for member firms, while preserving and enhancing the public's trust and confidence in the markets and the industry. SIFMA works to represent its members' interests locally and globally. It has offices in New York, Washington D.C., and London and its associated firm, the Asia Securities Industry and Financial Markets Association, is based in Hong Kong. More information on The Stock Market Game Program can be found at http://www.stockmarketgame.org.

About The Digital Arts Alliance

Each year, the Digital Arts Alliance makes it possible for more than 15,000 students and their teachers to experience firsthand how laptop computers, video production equipment, and the latest mobile-phone technologies are changing the ways young people can organize, present, and share information and issues that matter to them. Alliance members believe that using technologies to enhance personal expression creates an expanded kind of literacy, often referred to as 21st Century literacy, which people -- especially young people -- already use in their everyday lives.

About the Pearson Foundation

The Pearson Foundation extends Pearson's (NYSE: PSO) commitment to education by partnering with leading nonprofit, civic, and business organizations to provide financial, organizational, and publishing assistance across the globe. The Foundation aims to make a difference by sponsoring innovative educational programs and extending its educational expertise to help in classrooms and in local communities. More information on the Pearson Foundation can be found at http://www.pearsonfoundation.org.

SOURCE The Pearson Foundation

http://www.pearsonfoundation.org

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