2011 - Econ 2 1/11/2011 GDP Expenditure Approach Everything...

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Unformatted text preview: Econ 2 1/11/2011 GDP Expenditure Approach Everything produced gets consumed by someone o Personal Consumption (C) o Investment (I) o Government (G) o Export-iMport (X-M) Important equation to know o Y=C+I+G+(X-M) Artificial Economy from last time Corn: 2008 production :`0 million bushels o 6 million to hog farmer o 4 million to consumer o price: 2 per bushel o Tax Revenue: 20 million Hogs: 2008 production GDP Income Approach Everything produced is income to someone Calculate GDp by adding up income o Compensation of employees (wages, salaries, and benefits) o Proprietors income o Rental income o Corporate profits o Net interest o Indirect business taxes (sales and excise) o Depreciation (taken out when computing profits so have to add it back in) GDp vs. GNP Gross Domestic Product o Produced within a countrys borders Gross Nation Product o Produced by citizens of that country...
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2011 - Econ 2 1/11/2011 GDP Expenditure Approach Everything...

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