econ Jan 16 - ECON 2006 Measuring Aggregate Output CH 5 A...

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ECON 2006 CH. 5 1/16/08 Measuring Aggregate Output A Nations gross domestic product (GDP) is the total value of all final goods and services produced for the marketplace during a given period within the nations borders Not the following: 1. by focusing on the final goods double counting is avoided 2. general only goods and services produced for the market place count in any periods GDP, Home production of goods and services for example does not count 3. within a given period means for example in 2004 GDP measures only those goods actually produced in 2004 4. within the nations borders means goods produced within the borders of the us by foreigners count in GDP ( Note Gross National Product-GDP- measures output produced by citizens of a given country) There are 3 approaches to measuring GDP 1. Expenditure approach: GDP=C+1+G+NX 2. Value added Approach: GDP=Sum of the value added by all firms (figure 1 ) 3. Factor (Resource) Payments Approach: GDP = Sum of factor payments made by all firms =
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