GDP the total market value of all final goods and services produced within a

Gdp the total market value of all final goods and

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GDP-the total market value of all final goods and services produced within a country in one year Expenditure Approach: Add up aggregate spending on domestically produced final goods and services in the economy. Income Approach:Sum the total factor income earned by households from firms in the economy.
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Value Added Approach:Survey firms and add up the total value of their production of final goods and services. GDP= C+G+I+X-IM Module 11 Real GDP vs. Nominal GDP Real or Nominal growth rate: (Year 2/Year 1) -1 Real GDP= [Nominal GDP/ Price Index (calculated by GDP deflator)] x100 Economic Growth = Growth Rate Real GDP per capita = RGDP/Population Module 12 unemployed + employed= labor force percentage of unemployed out of labor force= unemployment rate Unemployment rate overstates as people are always looking for work Understates because of discouraged workers, marginally-attached workers, underemployed workers Job loser, job leaver, re entrant, new entrant Module 13 Frictional unemployed- looking for jobs Structurally unemployed- because of minimum wages, labor unions, efficiency wages, side effects of public policy (unemployment benefits) workers’ skills don’t match employers’ requirements supply of workers exceeds demand Cyclical unemployment- because of recessions Natural Rate of unemployment= frictional+structural; changes because of
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