GDP - PRINCIPLES OF MACROECONOMICS WHAT IS GDP & WHY...

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PRINCIPLES OF MACROECONOMICS WHAT IS GDP & WHY DOES IT MATTER? 1 Foster
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Foster 2 Spring 2010 Who cares about GDP?
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Foster 3 Spring 2010 The Business Cycle
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Three Ways to Measure GDP The spending or expenditure approach: measures the total amount spent on goods and services made in the United States. The income approach: measures the total income earned by all factors of production that produce goods and services in the United States. The production or output approach: measures the total value of all goods and services as they are shipped out of the factory.
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The computed values are not exactly the same due to errors in the collection of data. The difference between aggregate income and GDP (less than 1 percent of GDP) is called statistical discrepancy . Statistical Discrepancy
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A Precise Definition of GDP GDP: a measure of the market value of all newly produced final goods and services in a country during some period of time . All goods are measured in the same units (e.g., USD) Things that don’t have a market value are excluded, e.g., housework you do for yourself.
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A Precise Definition of GDP GDP: a measure of the market value of all newly produced final goods and services in a country during some period of time . Only newly produced goods and services are
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GDP - PRINCIPLES OF MACROECONOMICS WHAT IS GDP & WHY...

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