Measuring the Gross Domestic Product
Sandeep Bhaskar
Temple University
Sandeep Bhaskar
(Temple University)
Measuring the Gross Domestic Product
1 / 17
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Outline
1
Gross Domestic Product
2
Components of GDP
3
Calculating GDP
Sandeep Bhaskar
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Measuring the Gross Domestic Product
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Gross Domestic Product
Gross Domestic Product
It is the market value of all final goods and services produced in a
country in a given period of time.
No intermediate goods are included.
Production has to be inside the country.
Illegal activities and pro-bono work or work done at your home is not
included in the GDP.
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Gross Domestic Product
Two Approaches to Gross Domestic Product
Expenditure Approach
Add the expenditure of every part of the economy.
Income Approach
Add the income of every part of the economy.
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Gross Domestic Product
Circular Flow Diagram
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Components of GDP
Households
Households own all factors of production, and hence get all the
income from factors markets.
The inflow is shown as
Y
in the circular flow diagram.
They spend a part of it on consumption (
C
), they save a part of it
(
S
), and they pay a part of it as taxes.
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- Fall '08
- RAPPOPORT
- gross domestic product, National accounts, Measures of national income and output, Sandeep Bhaskar
-
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