chap 14a - 10/18/2010 Chapter 14A Measuring the Performance...

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10/18/2010 1 Chapter 14A Measuring the Performance of the Economy (Nominal and Real GDP) Learning objectives ` 1. Explain how the gross domestic product (GDP) of the economy measures an economy’s production of goods and services and distinguish between real and goods and services and distinguish between real and nominal GDP ` 2. Divide GDP according to who purchases the economy’s output and recognize the connection between income and output suggested by the circular flow view of the economy
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10/18/2010 2 Gross domestic product (GDP) ` Gross domestic product(GDP) = market value of final goods and services produced by labor and property located in the economy over a given year ` Market value Æ from the consumer’s point of view ` Final Æ not intermediate, not used ` Produced by resources located in the economy , not necessarily American citizens ` GDP includes production by foreign-owned companies located in the U.S. ` GDP excludes production by U.S.-owned companies in foreign countries ` GDP is an annual measure ` 2009 U.S. GDP = $14,119 billion Gross national product (GNP)
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This note was uploaded on 02/26/2012 for the course ECON 210 taught by Professor Staff during the Fall '08 term at Purdue.

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chap 14a - 10/18/2010 Chapter 14A Measuring the Performance...

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