Notes 4/8/08

Notes 4/8/08 - GDP, Product and Quantity Indexes...

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GDP, Product and Quantity Indexes 09/04/2008 04:48:00 Expenditure Approach to determining GDP Formula: Y = C + I + G + (X – M) Y = output (or GDP) C = consumption I = investment G = government purchases X = exports M = imports Together, they total everything people buy
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rented and an amount equivalent to the rental value of the house is put into the GDP  each year Government purchases – doesn’t include transfer payments, ie, Welfare services, social  services – these things are NOT counted in GDP Government expenditures:  30% of GDP in 1960 vs. 17% of GDP now Investment components:  Software and equipment investments gone up since 1960,  non-residential investments gone down, residential investments constant. Government purchases:
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Notes 4/8/08 - GDP, Product and Quantity Indexes...

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