A a consumer buying a newly built house B an airline buying a new plane C a

A a consumer buying a newly built house b an airline

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A. a consumer buying a newly built house B. an airline buying a new plane C. a clothing store adding to its goods to be sold D. a car company saving for a big purchase, like a new factory
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Monday Review Question : Which of the following would be the best example of capital? A. shoes that a shoe store keeps in order to sell to its customers B. computers that GM uses to run its robots that build cars C. a computer owned by a household and used by its children in schoolwork D. leather used by a shoe company that goes into the shoes it manufactures
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GDP: Terms Some key terms (so far) for GDP capital (K) investment (I) intermediate vs. final good
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GDP: Details Question : Capital goods are a final good and their production is counted in GDP. A. yes (I’m sure) B. yes (I think so) C. not sure D. no (I think) E. no (I’m sure)
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GDP by Production def : When measured by production, GDP for a nation’s economy is the market value of all final goods and services produced domestically in that year . U.S. 2017 II: $19.2 trillion
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GDP: Details Question : How many of the following things would be included in GDP when measured by production? - a used car that was just sold - me getting my hair cut - prostitution - a machine made for Boeing to manufacture jetliners - SpaceX produces a rocket for NASA - cement that is poured for a new building - Oracle software (U.S. made) sold in U.K. A. 1 B. 2 C. 3 D. 4 E. 5
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GDP by Expenditures (flip side of production) - consumption (C): purchases by households - investment (I): as before - government purchases (G) • smaller than govt. “expenditures” • govt. expenditures = purchases + transfers + interest payments (on its debt) - net exports (NX): exports – imports Shares of total GDP in the U.S. (BEA) C: 69% I: 16% G: 18% NX: -3% GDP = C + I + G + NX; $19.2 trillion in 2017 II
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GDP by Income (“Gross Domestic Income”) Question : Let’s look at one economic transaction – you buy $10 of fresh corn from a farmer at a roadside stand. Consider - income (or revenue) the farmer receives - value of the produced corn - dollars you spent How many of these are equal to each other in value? A. 0 B. 2 C. 3 D. not clear on what is being asked For the entire economy, we can measure GDP by production or expenditures & “Gross Domestic Income” is equal to them. A key point of the “circular flow.”
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Timeout Survey : It is critical to have good notes – this means more than what is on the slides and in particular it includes the reasoning behind the answers to the clicker questions. I ___ for this. A. could use more time B. have had sufficient time C. have had more time than I needed
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One Use of GDP In per capita terms, economists use it to measure well-being (in spite of limitations) ex : U.S.: $57,300 Australia: $48,800 China: $14,600 (~ U.S. in 1942) Haiti: $1,800 (~ U.S. in 1800)
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End of Part A: What is GDP? When measured by production , GDP for a nation’s economy is the market value of all final goods and services produced domestically in that year.
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