This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
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 country’s borders • Gross Nation Product o Produced by citizens of that country...
View Full Document
- Winter '08
- Macroeconomics, gross domestic product, GDP deflator, GDP expenditure approach, production GDP Income