lec13 march 22 - b. Underground economy c. Leisure-...

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March 22 2011 3 RD EXAM Measures of Our Economy’s Performance a. Unemployment Rate b. Inflation Rate c. Growth Rate d. Balance of Payments Gross Domestic Product 1. Define: the market value of all final goods and services produced within a nations borders in a given period- normally one year, including income earned by foreign-owned businesses. (gdp grow makes it nice) a. It does not include income earned abroad by u.s. residents or corporations. b. Categories: i. Goods produced for consumptions ii. Investment goods iii. National defense ( tank and airplane) government iv. Net Export (export – import) 2. What GDP does not measure a. Non-market transactions-
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Unformatted text preview: b. Underground economy c. Leisure- vacation d. Quality/price e. Economic Bads/pollution f. Distribuyion of income 3. An economies output is its income the only way an economy can increase its real income is to increase its real output Inflation/consumer Price Index CPI: the consumer price index cpi is a measure of the average change in prices over time in a basket of consumer goods and services. Inflation is a tax on your real income: as inflation increases, your income buys less. We track them always relative in to the base year. From the base year to feb 2011, price increase 121%...
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lec13 march 22 - b. Underground economy c. Leisure-...

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