12 - GDP = the market value of all final goods and serviced...

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GDP = the market value of all final goods and serviced produce within a country in a given period of time Market value – goods are valued at their market prices, so: - All goods measured in the same units (e.g. dollars in the U.S.) - Things that don’t have a market value are excluded (e.g. housework you do for yourself) o If you hire a company to mow your lawn, this will show up in the GDP, but if you do the work by yourself, this transaction will not show up in the GDP Final goods: Intended for the end user – no room to account for the intermediate goods - A pizza place that buys a tomato to put on pizza would have to value the tomato as an intermediate good since it was not designed for GDP includes tangible goods (like DVDs, mountain bikes, beer) - and intangible services (dry cleaning, concerts, cell phone service) - GDP is getting lighter since country’s are producing more services than real goods GDP includes currently produced goods, not goods produced in the past. GDP measures the value of production that occurs within a country’s borders, whether done by its own citizens or by foreigners located there. In a given time period – usually a year or a quarter (3 months) - Certain country, in what year Income and expenditure - GDP measures total income of everyone in the economy - NY has the same GDP as Australia (an entire continent) - GDP also measures total expenditure on the economy’s output of g&s (goods and
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This note was uploaded on 10/23/2011 for the course ECON 002 taught by Professor Eudey during the Fall '08 term at UPenn.

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12 - GDP = the market value of all final goods and serviced...

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