Chapter 5 - Chapter 5: Measuring Economic Activity: GDP and...

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Chapter 5: Measuring Economic Activity: GDP and Unemployment Gross Domestic Product (GDP) – the market value of the final goods and services produced in a country during a given period Final Goods and Services – goods/services consumed by the ultimate user because they are the end products of the production process; counted in GDP Intermediate Goods and Services – goods/services used up in the production of final goods and services and therefore are not counted in GDP Capital Good – a long-lived good, which is itself produced and used to produce other goods and services Consumption – spending by households on goods and services, such as food, clothing, and entertainment Private Sector Investment – spending by firms in final goods and services, primarily capital goods and services Government Purchases – purchases by federal, provincial, and municipal gov’ts of final goods and services; gov’t purchases do not include gov’t transfer payments, nor do they include interest paid on the public debt Net Exports – exports – imports Capital Consumption Allowance – accounting allowances for the using up of fixed capital in the production process Real GDP – a measure of GDP in which the quantities produced are valued at the prices in a base year than at current prices Nominal GDP – a measure of GDP in which the quantities produced are valued at current year prices; nominal GDP measures the current dollar value of production GDP Deflator – a measure of the price level of goods and services included in GDP Gross National Product (GNP) – the market value of goods and services produced by factors of production owned by the residents of a country Labour Force – total number of employed and unemployed people in the economy Unemployment Rate – the number of unemployed people / labour force Participation Rate – labour force / working age population Discouraged Workers – people who say they would like to have a job but have not made an effort to find one in the past four weeks GDP 1) Market value Services provided by government employees are typically not provided at market prices Thus, included in GDP at the governments cost of producing them
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This note was uploaded on 04/18/2008 for the course ECON 102 taught by Professor Lemche during the Spring '08 term at The University of British Columbia.

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Chapter 5 - Chapter 5: Measuring Economic Activity: GDP and...

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