Chapter 19 - Chapter 19: The American Economy Section 1:...

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1 Chapter 19: The American Economy Section 1: Economic Resources Producing Goods and Services *Goods - tangible products like books and automobiles that we use to satisfy our needs and wants. *Services - work that is performed for someone else. Factors of Production (4 types)- resources necessary to produce goods and services. 1. *Natural Resources - refers to all of the “gifts of nature ” that make production possible. (fertile fields, abundant rainfall, forests, mineral deposits, etc.) 2. *Labor - the nation’s labor force or human resources. Labor refers to both physical and mental efforts that people contribute to the production of goods and services. 3. *Capital - also called capital goods. They are the tools , machinery , and buildings used to make other products. -Capital goods are unique in that they are a result of production. -Economists differentiate capital goods from consumer goods . *Consumer goods are things like clothes, clocks, shoes, foods, bicycles, and radios. -Capital goods satisfy wants indirectly by aiding production of consumer goods. 4. *Entrepreneurs are individuals who start new businesses, introduce new products, and improve management techniques. Gross Domestic Product *GDP - the total value, in dollars, of all the final goods and services produced in a country during a single year. -A *final good - is a good, such as a loaf of bread, sold to the user. -The *intermediate goods - are the goods that go into the making of a loaf of bread, (flour or wheat, sugar, honey) are not counted in GDP. -When computing GDP, economists count only final goods and services. -If they counted both final and intermediate goods; they would be double-counting, or counting a good more than once. -Second hand sales - the sale of used goods - are not counted as part of the GDP as well. -Only the original sale is included in GDP. Measuring GDP – (chart p. 426) -Remember that GDP is a monetary measure. -A monetary measure is helpful if we are to compare the number of goods and services produced and get a meaningful idea of their relative worth. -If GDP is higher than the previous year, then the economy is expanding
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This note was uploaded on 07/06/2009 for the course BUS BAM303 taught by Professor Na during the Summer '09 term at 東京大学.

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Chapter 19 - Chapter 19: The American Economy Section 1:...

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