Basic+Macroeconomic+Concepts+-+I

Basic+Macroeconomic+Concepts+-+I - Basic Macroeconomic...

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Basic Macroeconomic Concepts - I
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Micro vs. Macro Macroeconomics : The study of the economy as a whole. We begin our study of macroeconomics with the country’s total income and expenditure.
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Income and Expenditure Gross Domestic Product (GDP) measures total income of everyone in the economy. GDP also measures total expenditure on the economy’s output of g&s. For the economy as a whole, income equals expenditure income equals expenditure because every dollar a buyer spends is a dollar of income for the seller.
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…the market value of all final goods & services produced within a country in a given period of time. Gross Domestic Product (GDP) Is… Goods are valued at their market prices, so: All goods measured in the same units (e.g., dollars in the U.S.) Things that don’t have a market value are excluded, e.g., housework you do for yourself.
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…the market value of all final goods & services produced within a country in a given period of time. Gross Domestic Product (GDP) Is… Final goods : intended for the end user Intermediate goods : used as components or ingredients in the production of other goods GDP only includes final goods – they already embody the value of the intermediate goods used in their production.
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…the market value of all final goods & services produced within a country in a given period of time. Gross Domestic Product (GDP) Is… GDP includes tangible goods (like DVDs, mountain bikes, beer) and intangible services (dry cleaning, concerts, cell phone service).
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…the market value of all final goods & services produced within a country in a given period of time.
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This note was uploaded on 11/23/2010 for the course ECONOMICS Econ 13 taught by Professor Georgesarraf during the Winter '10 term at UC Irvine.

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Basic+Macroeconomic+Concepts+-+I - Basic Macroeconomic...

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