EC102-5SPRING10B_revised

EC102-5SPRING10B_revised - 51...

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Chapter 5:  Measuring a Nation’s Income  Gross Domestic Product – GDP 5-1

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Important Facts about GDP: 5-2
Example: Item Price Quantity CDs \$15 1000 Tapes \$ 5 2000 o Calculate GDP by multiplying P * Q for each  good and then adding your results together 5-3

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Important Facts about GDP continued… 5-4
Items not included in GDP: 5-5

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How do we actually measure GDP?  Three Methods: o Value-added (production) Approach  o Expenditure Approach o Income Approach 5-6
Value-Added Example Col (i) Col (ii) Col (iii) Col (iv) = Col (ii – iii) Stage of  Production Total  Value Cost of  Intermediate  Products Value Added =       Total  Value - Cost of Intermediate  Products Contribution to GDP: 5-7

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Total value of all transactions:  5-8
Income Approach Factors Compensation Land Labour Capital Entrepreneurship 5-9

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Income Approach to Measuring GDP (this is in the notes, don’t copy) First determine:
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This note was uploaded on 11/25/2010 for the course ECON 102 taught by Professor ? during the Spring '08 term at Waterloo.

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EC102-5SPRING10B_revised - 51...

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