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GDP

GDP. Chapter 7. Gross Domestic Product. GDP is the total market value of a country’s output. It is the market value of all final goods and services produced within a given period of time by factors of production located within a country. Terms 1: Final. Final Intermediate Value added.

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GDP

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  1. GDP Chapter 7

  2. Gross Domestic Product • GDP is the total market value of a country’s output. It is the market value of all final goods and services produced within a given period of time by factors of production located within a country.

  3. Terms 1: Final • Final • Intermediate • Value added

  4. What is not counted • Goods produced within the household • Used goods sold in the market even if to final buyers.

  5. What is ??? counted • Fixing damage: Earthquake or storm • Medical bills for lung damage due to bad air

  6. GDP vs GNP • GDP factors of production located within a country • GNP factors of production owned by a country’s citizens, regardless of where the output is produced.

  7. Calculating GDP • Expenditure Approach • Consumption, C • Investment, I • Government, G • Net Exports, EX - IM • GDP = C + I + G + (EX - IM)

  8. Calculating GDP II • Income Approach • GDP = NI + some adjustments • National Income is total income earned by factors of production owned by a country’s citizens

  9. GDP and Social Welfare • Leisure • Reducing pollution • Storm and other disaster damage. • Underground economy • Per capita ?? Measure exchange rates

  10. Nominal versus Real GDP • Nominal: Measured in current dollars • Real: adjusted for inflation.

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