Menu_01_Feb_06 - plus ii. Investment (I) plus iii....

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TODAY’S MENU: Wednesday 01 February 2006 I. BUSINESS A. Practice Problems 1. Chapter 5: 1-6, 8-10 B. First Exam (Chapters 3-6): Monday 13 February C. FOMC meeting II. SUBSTANCE A. Gross Domestic Product (GDP) 1. Definition (important) a. What counts and what does not b. GDP per capita and intercountry comparisons 2. Two methods of measuring: “A dollar spent is a dollar earned.” a. Income Approach (who is earning) i. Wages and salaries plus ii. Profits plus iii. Rents plus iv. Net interest. b. Expenditure Approach (who is spending): y = C + I + G + X – IM i. Consumption (C)
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Unformatted text preview: plus ii. Investment (I) plus iii. Government spending (G) plus iv. Exports (X) minus v. Imports (IM) 3. Thought Experiment: Can GDP ever be negative? 4. Thought Experiment #2: How is it possible for some countries to have exports in excess of their total GDPs? 5. Problem: Does the percent change in GDP measure economic growth? B. Economic Growth and GDP 1. Nominal GDP: measured in current dollars 2. Real GDP: measured in constant dollars III: NEXT TIME A. Continue Chapter 5: “Measuring Economic Activity…”...
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This note was uploaded on 04/09/2008 for the course ECON 2000 taught by Professor Roussell during the Spring '06 term at LSU.

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