Lecture Notes 3-23-10 - Lecture Notes Chapter 15 Power...

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Lecture Notes Economics T-Th A. Ordonez Chapter 15 809-195-3K1C 3/23/10 Power Point 1 The components of GDP: GDP includes all items produced in the economy and sold legally in markets. What is not included in GDP? GDP excludes most items that are produced and consumed at home and that never enter the marketplace. It excludes items produced and sold illicitly, such as illegal drugs. EQUATION GDP (Y) is the sum of the following: Consumption (C) Investment (I) Government Purchases (G) Net Exports (NX) (equation to memorize) = + + + Y C I G NX Consumption (C): - The spending by households on goods and services, with the exception of new housing. Investment (I): - The spending on capital and capital equipment, inventories and structures, including new housing. Government Purchases (G): - The spending on goods and services by local, state, and federal government. o
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This note was uploaded on 05/10/2010 for the course ECONOMICS 809-195-3K taught by Professor A.ordonez during the Spring '10 term at Gateway Tech.

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Lecture Notes 3-23-10 - Lecture Notes Chapter 15 Power...

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