Lecture 8

Lecture 8 - 1. Chapter 6 Circular Flow 1. GDP 2. GN 3. N....

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1. Circular Flow Chapter 6 1. GDP 2. GN 3. N. I. Acc. 4. Nominal vs Real GDP 5. Social Welfare End of Chapter 6 6. Growth 7. U 8. Inflation 1. Circular flow Firms output HH input firms supply products to output, output demands, HH supplies to Inputs, inputs demands to firms inverse circular flow firms to input (TC), Input to HH (income, rent, wage, interest earnings), HH to output (TE), Output to firms (Total Revenue) Inverse circular flow measures GDP We can add in “financial market” in the circular flow Can have demand and supply relationship with firms and households We can also add the “government” in the circular flow Governments interact with HH We can add in “external” markets (i.e. foreign goods)
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These circular flows are unmanageable when many more players/markets are added in along with lines showing more relationships 1. GDP – Gross Domestic Product The market value of all final goods and services produced within the economy in a given time period Only final goods count that is when the goods come into use
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This note was uploaded on 07/05/2011 for the course ECON 1 taught by Professor Nagata during the Spring '08 term at UCLA.

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Lecture 8 - 1. Chapter 6 Circular Flow 1. GDP 2. GN 3. N....

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