Chapter12 - Pr oduct M ar kets and National Output Chapter...

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Unformatted text preview: Pr oduct M ar kets and National Output Chapter 12 Discussion Topics Cir cular flow of payments Composition and measur ement of Gr oss Domestic Pr oduct (GDP) Consumption, saving and investment Equilibr ium national income and output Four major sectors I n this economy… We can measure macro economic activity in either resource markets or product markets. Result is the same… Circular Flow Diagram for General Economy Businesses are net borrowers in financial markets while households are net savers… Businesses make investment expenditures, Governments make expenditures, and Households make consumption expenditures Businesses receive funds from total expenditures in product markets while households, who own businesses, receive wages, rents, interest and profits in resource markets where they provide labor and capital services… M easur ements of Gr oss Domestic Pr oduct • The nation’s annual output is r efer r ed to as Gr oss Domestic Pr oduct (GDP) • Nominal GDP • Real GDP • Consumer expenditur es ar e classified as • dur able goods • nondur able goods • ser vices Everything below zero represents a recession GDP = C + I + G + (X – M) Types of consumer expenditures… Types of investment expenditures… Calculation of net exports… Types of government expenditures… I tems not included in GDP… Under standing the Domestic Deter minants of GDP C, I and G Autonomous or...
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This note was uploaded on 12/01/2010 for the course AGEC 105 taught by Professor Capps during the Summer '08 term at Texas A&M.

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Chapter12 - Pr oduct M ar kets and National Output Chapter...

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