In the first case you want to calculate the growth

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Unformatted text preview: determined? How do Demand and Supply interact to clear the market (that is, to reach equilibrium if the market is not in equilibrium)? Chapter 10 1. In addition to the definition of GDP, you need to know, based on the definition, which goods are included in GDP and which are not (e.g., goods/services not in the market –like babysitting- or the treatment of inventories). 2. How do you calculate nominal GDP? Specifically, how do you calculate GDP using the expenditure, income and product approach? In the last homework assignment, some ofyou approached me regarding the last question in the problem set about calculating GDP using the income approach. For the most part, the confusion came from mixing both the income and product approaches to calculate GDP. Make sure to know that the expenditure approach involves knowing what consumption, investment, government expenditures and net exports are. The income approach involves wages, after- tax profits, interest payments and taxes. And the product approach involves the value added of every good and service in the economy. So don’t...
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This document was uploaded on 02/20/2014 for the course ECON 1002 at University of Minnesota Duluth.

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