WORKSHEET 1_answers-1

WORKSHEET 1_answers-1 - WORKSHEET 1 - ANSWERS Recitation...

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WORKSHEET 1 - ANSWERS Recitation for Economics 2020-300 – Principles of Macroeconomics Spring 2008 1) Define GDP: GDP is the market value of all final goods and services produced within a country in a given period of time. 2) List and explain each component of GDP: a) GDP: Y = C + I + G + NX b) Consumption: is spending by households and goods and services. c) Investment: is spending on capital equipment, inventories, and structures such as new housing. Investment does not include spending on stocks and bonds. d) Government spending: is spending on goods and services by all levels of government. e) Next exports = value of foreign purchases of U.S. domestic production (exports) – U.S. domestic purchases of foreign production (imports). Imports must be subtracted because consumption, investment, and government purchases include expenditures on all goods, foreign and domestic, and the foreign component must be removed so that only spending on domestic production remains. 3) Suppose that an economy produces only three goods: potato chips, televisions, and DVDs.
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This note was uploaded on 02/28/2008 for the course ATOC 1050 taught by Professor Forrest,be during the Fall '06 term at Colorado.

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WORKSHEET 1_answers-1 - WORKSHEET 1 - ANSWERS Recitation...

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