ec-29 - Chapter 8 Class(2 I Gross Domestic Product...

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Chapter 8 Class (2) I. Gross Domestic Product: measuring two ways a. Expenditure approach i. A way of computing national income by adding up the dollar value at current market prices of all final goods and services b. Income approach i. A way of measuring national income by adding up income received by all factors of production c. Deriving GDP by the expenditure approach = C + I + G + X i. Consumption (C) 1. Durables a. Life span of more than 3 years 2. Nondurables a. Life span of less than 3 years 3. Services a. Intangible commodities ii. Gross Private Domestic Investment (I) 1. The creation of capital goods such as factories and machines, that can yield production and hence consumption in the future 2. Fixed investments 3. Inventory investment 4. New residential structures
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iii. Government Expenditures (G) 1. State, local, and federal 2. Valued at cost iv. Net Exports (foreign expenditures) 1. =total exports – total imports d. Other formulas from the expenditure approach i. Depreciation and net domestic product (NDP)
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This note was uploaded on 04/19/2011 for the course ECON 200 taught by Professor Staff during the Winter '09 term at Indiana.

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ec-29 - Chapter 8 Class(2 I Gross Domestic Product...

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