Macroeconomics Lecture 2 Notes Econ1010.docx - An Economy's total income equals total expenditure How Gross Domestic Product is calculated Real GDP and

Macroeconomics Lecture 2 Notes Econ1010.docx - An Economy's...

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An Economy's total income equals total expenditureHow Gross Domestic Product is calculatedReal GDP and Nominal GDPIs GDP and good measure of economic wellbeing?Income must equal ExpenditureEvery transaction has buyer and sellerGDP is a measure of the total income as well as the expenditure of an economyGDP is market value of all final goods and services produced within a country in a given time periodFinal goodsBoth tangible and intangibleCurrently producedWithin a geographic confines of a countryValue of production within an interval of timeGDP EquationY = C + I + G + NXConsumption (C)Spending of households on goods and services except new houses
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Investment (I)Spending on capital equipment, inventories and structures including new housing.Government Purchases (G)Spending on goods and services by local, state and federal governments
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