Chapter 8 Measuring the Economy

Chapter 8 Measuring the Economy - Chapter 8 Measuring the...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 8 Measuring the Economy’s Performance - The total income or total output o Spending by consumers is income to someone Circular flow say the dollar value of a nation’s output is equal to total income - National income accounting o GDP Gross Domestic Product The total market value of all final goods and supplies produced by factors of production located within a nation’s boarders during a year Dollar value of goods purchased equals gross domestic product which equals income o Gross domestic product calculations must exclude intermediate goods Intermediate goods- goods used up entirely in the production of final goods (purchase of wheat to make bread) Valve added- The dollar value of an industry’s sales minus the value of intermediate goods Exclusions of financial transactions, transfer payment and secondhand goods Financial transactions o Securities- purchase of a share of o Government transfer payments o Private transfer payments Transfer of secondhand goods
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 3

Chapter 8 Measuring the Economy - Chapter 8 Measuring the...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online