8.2.docx - 1 8.2 National Income Accounting a Gross...

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1. 8.2- National Income Accounting a. Gross Domestic Product (GDP) i. Total market value of the nation’s annual final product produced by factors of production located within national borders. ii. Value of flow of production per year b. Stress on final output i. GDP does not count intermediary goods because doings so would be counting twice c. Exclusion of Financial Transactions, Transfer Payments, and Secondhand Goods Not included in GDP calculation. i. Financial Transactions 1. Three categories a. Buying and Selling Securities i. Stocks are transfer of ownership ii. Any fees for broker count towards GDP b. Government Transfer Payments i. Social security and unemployment c. Private transfer payments i. Getting money from someone ii. Transfer of secondhand goods 1. Counting sale of secondhand goods would be counting the same
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