Chapter 6 Assignment

Chapter 6 Assignment - Chapter 6 1. In what ways are...

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Chapter 6 1. In what ways are national income statistics useful? This accounting enables economists and policy makers to: Assess the health of the economy by comparing levels of production at regular intervals. Track the long-run course of the economy to see whether it has grown, been constant, or declined Formulate policies that will safeguard and improve the economy’s health. 2. Why do economists include only final goods in measuring GDP for a particular year? Why don’t they include the value of stocks and bonds sold? Why don’t they include the value of used furniture bought and sold? To avoid counting components that have been bought and sold many times, GDP includes only the market value of final goods and ignores intermediate goods altogether. This value is not included in GDP because such sales and purchases simply transfer the ownership of existing assets; such sales and purchases are not themselves (economic) investment and thus should not be counted as production of final goods and services. Used furniture was produced
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This note was uploaded on 10/13/2008 for the course ECN 201 taught by Professor Mapp during the Spring '08 term at A.T. Still University.

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Chapter 6 Assignment - Chapter 6 1. In what ways are...

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