GDP Notes - Lecture Notes What is GDP GDP(Gross Domestic...

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Lecture Notes: What is GDP? GDP (Gross Domestic Product): the market value of all final goods and services produced in a certain country in a given period of time. This definition is divided into 4 parts: 1) Market Value whatever their value is in a dollar amount, that is sold at a store 2) Final Goods and Services A final good or service is an item bought by a user during a specific time Final goods are not the same thing as an intermediate good, which is an item that is produced by one company, bought by another, and is used as a part of a final good/service Not counting intermediate goods/services makes sure that you are not double counting 3) Produced Within a country GDP is a measure of production within a single country, does not include trade with another country 4)In a given period of time Measured in a specific time frame, usually a year or a half a year Who uses GDP data? 1) White House and Congress Federal budget 2) Federal Reserve Monetary policy 3) Wall Street Indicator of how the economy is doing
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Unformatted text preview: 4) Business Community • Shows economic performance and predictions Proponents of GDP-These are the people that construct the economy 1) Households • Households are the ones in the economy that buy product from the firms of a country, giving money to keep the business going 2) Firms • Are responsible for buying labor, capital, and land in the factor markets • Pay for wages of labor services, interest for the use of capital, and rent of the land used 3) Government • Involved in buying goods and services from firms. Their purchases add up and is put into a number called the government expenditure • The government pays for their debt with taxes to households and firms 4) Rest of the World • The use of imports(buying trade from countries) and exports (selling trade to countries) have an effect on the overall GDP *GDP is used everywhere and has many different functions for different groups, such as a government or a firm....
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