02_Lecture_Slides_with_Graphs

02_Lecture_Slides_with_Graphs - Economics 104 Fall 2010 1...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon

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

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

Unformatted text preview: Economics 104 Fall 2010 1 Macroeconomics: Issues and Data Outline & Readings 1. An Overview of the Macroeconomy; chapter 4 2. Measuring Economic Activity; chapter 5 3. Measuring the Price Level and Inflation; chapter 6 Economics 104 Fall 2010 2 Macroeconomics: Issues and Data (continued) 2. Measuring Economic Activity Gross Domestic Product The principal measure of economic activity is Gross Domestic Product the market value of final goods and services produced within a country in a given period. What does this mean and how do we measure it? Market value To aggregate across all the different types of goods and services in the economy, market prices are used. For example: Production Market Price Value Oil 100 barrels $70 per barrel $7 000 Wheat 100 tonnes $150 per tonne $15 000 Total Market Value of Production $22 000 Economics 104 Fall 2010 3 A richer example: Production Market Price Value Oil 100 barrels $70 per barrel $7 000 Wheat 100 tonnes $150 per tonne $15 000 Healthcare (government provided) ? $ ? $10 000 Home schooling (non-market) ? $ ? ? Total Market Value of Production $32 000 Government provided services (those without fees) are valued based upon the costs to provide them. Many non-market activities are simply not measured. Economics 104 Fall 2010 4 Final Goods and Services Final goods and services those that are consumed. Intermediate goods and services those that are used in the production process. GDP measures the market value of final goods and services. This avoids double counting of intermediate goods . Equivalently, we can measure GDP by adding up value added in production. Value added = market value of good or service- cost of intermediate goods and services purchased from other firms Important qualification: factories, machines, equipment, called capital goods , are used for pro- duction but counted as final goods ....
View Full Document

This note was uploaded on 01/28/2011 for the course ECON 104 taught by Professor Voss during the Winter '10 term at University of Victoria.

Page1 / 19

02_Lecture_Slides_with_Graphs - Economics 104 Fall 2010 1...

This preview shows document pages 1 - 5. Sign up to view the full document.

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