March 29 recitation

March 29 recitation - March 29 Econ recitation 1) GDP Gross...

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March 29 Econ recitation 1) GDP – Gross Domestic Product a) Market Value of final goods and services produced within a country in a specific time period a.i) Only final goods and services counted (a.i.1) Which means sell of intermediate good exchanges doesn’t count. (any goods used for production) (a.i.2) Only thing that counts is final cost of product and how many of those sold. a.ii) Only transactions involving production count (a.ii.1) Financial transactions and income transfers do not count (a.ii.1.a) Like loans, monetary gifts, a.iii) Only production inside the country a.iv) Measured in Dollars b) GDP = (Price of A * Quantity of A) + (Price of B * Quantity of B) c) Two approaches to GDP c.i) Expenditure approach (We Do) (c.i.1) Total up expenditures on goods and services produced in the year (c.i.2) GDP =(C) + (I) + (G) + (NX) (c.i.2.a) Personal Consumption – C (c.i.2.a.i) Consumption of goods and services bought by households c.i.2.a.i.1. Non durable goods c.i.2.a.i.1.a. Short term – food, etc
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March 29 recitation - March 29 Econ recitation 1) GDP Gross...

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