Chapter 4 Notes

Chapter 4 Notes - Chapter 4 Notes Measuring GDP Economic...

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Chapter 4 Notes: Measuring GDP & Economic Growth GDP Defined o GDP (gross domestic product)-market value of the final goods and services produced within a country in a given time period o Market Value-valuing items at their market values--the prices at which items are traded in markets o final good-item that is bought by its final user during a specified time period intermediate good-an item that is produced by one firm, bought by another firm & used as a component of a final good/service double counting-if add value of intermediate good/service produced to value of final good, you count same thing twice some goods can be final goods in some situations & intermediate good in other situations some items are neither final goods nor intermediate goods & are not part of GDP ex: financial assets, secondhand goods o Produced Within a Country only goods that are produced within a country count as part of that country’s GDP o In a Given Time Period GDP measures value of production in a quarter of a year (quarterly GDP) or a year (yearly GDP) also measures total income and total expenditure shows direct link between productivity and living standards GDP & Circular Flows of Expenditure and Income o Households and Firms households sell and firms buy services of labor, capital, and land in factor markets firm’s retained earnings are part of household’s income firms sell and households buy consumer goods/services
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This note was uploaded on 11/14/2011 for the course ECO 202 taught by Professor Normmiller during the Spring '08 term at Miami University.

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Chapter 4 Notes - Chapter 4 Notes Measuring GDP Economic...

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