ECON_102_CH5

ECON_102_CH5 - 51 Chapter5: (Andincomeearned)withinacountry...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 5:  Measuring a Nation’s Income  Gross Domestic Product – GDP Is the  market value of all  final goods and services  produced (And income earned)  within a country In a given period time (such as a year) Valued at market price Important Facts about GDP: GDP is basically a production concept GDP is a flow variable (a variable with a time dimension) o Stock variable – quantity existing in the here and now (no time dimension)  [just talked about in class, not written in lectures] o Ex. The number of students in the ECON102 lecture on Thursday  January 12, 2011 at 2:02 p.m.  – Stock Variable Market Value – see example on the next page Example: Item Price Quantity 5-1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
CDs $15 1000 Tapes $ 5 2000 o Calculate GDP by multiplying P * Q for each good and then  adding your results together o GDP = ($15 * 1000) + ($5 * 2000) = $25,000 Important Facts about GDP continued… In the national accounts, firms and the government are the units which produce  output in the domestic economy GDP includes only  final goods , not intermediate goods o Final Good -  a good that is ready to be used by the end user. Does not  need to be processed any further. o Intermediate Good –  an input into the production good. It is used to  produce a final good. Question:  Are the following final or intermediate goods i) A Hallmark greeting card -  final 5-2
Background image of page 2
ii) The paper used to make the greeting card -  intermediate iii) A brand new sports car -  final iv) The tires on the brand new sports car -  intermediate Items not included in GDP: Used or second hand goods Non-marketed goods and services Financial assets Question : An art collector recently sold apiece of pottery for $300. He had purchased it  for $200 two years earlier. Based on this information GDP will increase by: a) $100 b) $0 c) $300 d) $200 5-3
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 15

ECON_102_CH5 - 51 Chapter5: (Andincomeearned)withinacountry...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online