LECTURE16MACROINTRO

LECTURE16MACROINTRO - Introduction to Macroeconomics Gross...

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Introduction to Macroeconomics Gross Domestic Product: The Gauge of The Economy’s Performance
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Gross Domestic Product (GDP) is the market value of an economy’s final products made within its borders over a period of one year GDP = Σ P i Q i = $14.3 trillion in 2008.
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For an item to be counted in current GDP it must be domestically produced and sold as a final product through a market . The following items are not included in GDP Sales of intermediate products Sales of used goods Purely financial transactions Nonmarket activities (Do-it-Yourself Activity) Imported products and services Increases in the value of existing assets
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GDP = Aggregate Income Whatever is spent on domestic production ends up as domestic income: Compensation of employees, interest, rent, depreciation, profit. Aggregate expenditure covers the cost of producing products and profit of sellers When GDP goes up so does aggregate income
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2007 GDP (in U.S. Dollars, purchasing power parity) in Selected
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This note was uploaded on 02/08/2010 for the course EC 205 taught by Professor Hyman during the Spring '08 term at N.C. Central.

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LECTURE16MACROINTRO - Introduction to Macroeconomics Gross...

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