ch.6outline - Macroeconomics-ch.6 I. Measuring National...

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Macroeconomics-ch.6 I. Measuring National Output and National income a. Macroeconomics relies on data b. National income and Product accounts - data collected and published by the government describing various components of national income and output in the economy. i. These accounts are produced by the Bureau of Economic Analysis(BEA) II. Gross Domestic Product a. Gross domestic product- the total market value of all final goods and services produced within a given period by factors of production located within a country i. Key concept in the national income and product accounts b. Provides us with a country’s economic report card III.Final Goods and Services a. Final goods and services - goods and services produced for final use b. Intermediate goods - goods that are produced by one firm for use in further processing by another firm. i. the value of intermediate goods are not counted in GDP c. Double counting - would be the result if we calculated intermediate goods along with final goods in GDP d. Value added - the difference between the value of goods as they leave a stage of production and the cost of the goods as they entered the stage. e. Adding the total values of sales at each stage of production would significantly overestimate the value of the final good. IV. Exclusion of used goods and paper transactions
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a. GDP is only concerned with NEW, or current production-old output s not counted b. GDP ignores all transactions in which no new goods and services are produced i. Ex.: sales of stocks and bonds are not included in GDP, nor is Profit from stocks and bonds 1. Although if you pay a fee to a broker than that is counted in GDP because he is performing a service V. Exclusion of output produced abroad by domestically owned factors of production a. GDP is the value of output produced by factors of production located within a country . b. Three basic factors of production: land, labor, and capital c. U.S. citizens working for a foreign company is not counted in U.S. GDP- because the output isn’t being produced within the U.S. d. Profits earned abroad are not counted in U.S. GDP e. Output produced by foreigners working in the U.S. is counted in U.S. GDP f. Profits earned by foreign companies within the U.S. is counted in the U.S. GDP
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This note was uploaded on 04/26/2009 for the course ECO 304K taught by Professor Hickenbottom during the Spring '10 term at University of Texas at Austin.

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ch.6outline - Macroeconomics-ch.6 I. Measuring National...

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