201C5ol - CHAPTER 5 NATIONAL-INCOME ACCOUNTING-Measurement...

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CHAPTER 5 - NATIONAL-INCOME ACCOUNTING -Measurement of economic activity -Developed by Simon Kuznets about 1934 -Helps government policy makers in formulating economic policies and evaluating performance -Gross Domestic Product (GDP): total market value of all final goods and services produced IN a nation in a given time period -could also use: -C + I + G + (X-M) -sum of value added -add up receipts of households, gov't, and businesses -GDP per capita--best way to make international comparisons -Unreported income ("off the books"): -Legal--painters, lawn mowing, child care, deck builders -Illegal--prostitutes, drug dealers, "bookies" -"In The News" p. 90--Unreported income is part of the underground economy; the "legal" $$$ far exceeds the illegal -Intermediate goods--goods purchased for use as input in the production of final goods
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-GM buying "Alpine Stereos" to put in Corvettes -Toyota purchasing "Goodyear Tires" for their vehicles -Real vs. Nominal GDP: -nominal GDP--the value of final output produced in a
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This note was uploaded on 02/22/2011 for the course ECON 201 taught by Professor Hickman during the Spring '11 term at Frederick Community College.

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201C5ol - CHAPTER 5 NATIONAL-INCOME ACCOUNTING-Measurement...

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