Section 2 - UNIVERSITY OF CALIFORNIA BERKELEY Department of Economics Dorian Carloni ECON 100B Fall 2011 SECTION 2 Measuring Macroeconomic Data 2.1

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UNIVERSITY OF CALIFORNIA, BERKELEY Dorian Carloni Department of Economics ECON 100B, Fall 2011 SECTION 2: Measuring Macroeconomic Data 2.1. National Income Accounting Introduction Three di/erent approaches: 1. Product approach: the dollar amount of output produced. 2. Expenditure approach: the dollar amount spent by purchasers. 3. Income approach: the dollar incomes earned by production. Fundamental identity of national income accounting: Total production = Total expenditure = Total income (at least in theory!) Product approach the current market value a. underground economy and household work such as cooking at home and cleaning are not included b. inputed value: e.g. house owners, services provided by the government (national defence, police, of all : goods and services that are not completely used up in the production process. Include capital used to produce other goods and inventory investment. newly produced : a bike produced last year doesn±t contribute to this year±s GDP in the domestic economy : a computer produced in Japan doesn±t contribute to the U.S. GDP : usually a quarter or a year Expenditure approach total spending : C+I+G+NX, where: nondurable goods, services).
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This note was uploaded on 03/18/2012 for the course ECON 100B taught by Professor Wood during the Spring '08 term at University of California, Berkeley.

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Section 2 - UNIVERSITY OF CALIFORNIA BERKELEY Department of Economics Dorian Carloni ECON 100B Fall 2011 SECTION 2 Measuring Macroeconomic Data 2.1

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