macrochapter23 - Rikki Norton Chapter 23 1. GDP is defined...

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Rikki Norton Chapter 23 1. GDP is defined as the market value of all final goods and services produced within a country in a given period of time. In spite of this definition, some production is left out of GDP. Explain why some final goods and services are not included. Some final goods are left out of GDP because measuring them can be very difficult. These items include illegal items and home grown produce. 2. Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP. The value of the intermediate good that is used to produce a final good is included in the price of the final good, where as the value of the intermediate good not being used in a final product is added to a firm’s inventory where it is counted as part of GDP. 3.
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This note was uploaded on 03/14/2011 for the course POLSCI 1123 taught by Professor Thompson during the Spring '11 term at Oklahoma State.

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