GDP is known as Gross Domestic Products of a nation, state, city or individual's income/expenditure. And, how do we measure the size of a nation's economy? Let's say we purchase a cup of coffee for $5.00. Those five dollars are factored into America's economy known as GDP, so is the cost of the coffee machine, the salary of an employee. In fact, most of what we see around us is part of the GDP calculation.

GDP is the important gauge factor of how well our economy strives. GDP measures the total value of all goods and services sold in the country such as America. United States of America's GDP for the year 2017 was $19.39 trillion.

The most common way to calculate GDP is the summation of (C) Consumption + (I) Investment + (G) Government spending + (NX) Net Exports.

Consumption in known as consumer spending like buying a cup of coffee.
Investment is the amount of money businesses invest in buildings, land, and equipment. And, it also includes major consumer investment like buying a house.
Government spending is the local, state, and the national government spends on roads, schools, libraries, law enforcement, and defense.
Net export is the sum of export minus import.

You will often hear about the GDP growth rate or percentage of change in GDP over time. Generally, if the economy is healthy GDP will expand (increase) each quarter. If the economy is in bad shape GDP growth will decline. If the growth rate declines two consecutive quarters then the economy is in recession.

Now, what is Capita and how do we measure it?
Capita is the amount of expenditure of an individual person and it is simple to calculate. Capita is equal to the division of (summation of GDP) divided by the population of the country and, more importantly, if you were narrowing it down to a particular geographic area such as city or state then use the figures respectively. In the year 2017 America's population was 325.7 Million. Therefore, Capita, the amount of expenditure is $59,533 per individual.

To bring meaning to GDP and Capita we need to understand one more factor to our equation you guess it correctly it is income. The average income for the year 2017, the mean income per Capita was $48,150 and the median household income was $61,372.