MACROECON Chapter 07 - Measuring Domestic Output, National Income, and the Price Level

MACROECON Chapter 07 - Measuring Domestic Output, National Income, and the Price Level

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Published on CourseNotes (http://www.course-notes.org) Home > Chapter 07 - Measuring Domestic Output, National Income, and the Price Level Chapter 07 - Measuring Domestic Output, National Income, and the Pr ice Level Assessing the Economy's Performance National income accounting measures the economy's performance by measuring the flows of income and expenditures over a period of time. National income accounts serve a similar purpose for the economy, as do income statements for business firm s. Consistent definition of terms and measurement techniques allows us to use the national accounts in comparing conditions over time and across countries. The national income accounts provide a basis for of appropriate public policies to improve economic performan ce. Gross Domestic Product GDP is the monetary measure of the total market value of all final goods and services produced within a country in one year. Money valuation allows the summing of apples and oranges; money acts as the common denominator. GDP includes only final products and services; it avoids double or multiple counting, by eliminating any intermediate goods used in production of these final goods or services. GDP is the value of what has been produced in the economy over the year, not what was actually sold. GDP Excludes Nonproduction Transactions GDP is designed to measure what is produced or created over the current time period.Existing assets or property that sold or transferred, including used items, are not counted. Purely financial transactions are excluded. Public transfer payments, like social security or cash welfare benefits. Private transfer payments, like student allowances or alimony payments. The sale of stocks and bonds represent a transfer of existing assets. (However, the brokers' fees ar e included for services rendered.) Secondhand sales are excluded, they do not represent current output.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern