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Unformatted text preview: & Macroeconomics Lecture 5 Gross Domestic Product (GDP) 1. What is the GDP? The economys total output is one of the major variables of concern to macroeconomists. While there are several ways to measure it, the most popular is the gross domestic product. GDP is the money value of all final goods and services produced in the domestic economy during a specified period of time usually one year. 2. Why we measure GDP? We need to measure GDP in order to track the central macroeconomic problems which are growth, business cycle and unemployment. 3. How to measure GDP? There are 3 methods to calculate GDP which are derived from the 3 stages of economic activity & & Production approach [Production Side] The value added approach: Value of final goods and services produced in the country in a given year & Income approach [Income/Cost Side] Total income & revenue received by the factors of production during one year & Expenditure approach [Expenditure Side] Total spending on all goods and services...
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This note was uploaded on 04/08/2011 for the course MGMT 401 taught by Professor Mohamed during the Spring '11 term at Manor.
- Spring '11