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Economic Indicators and GDP

Economic Indicators and GDP. Chapter 12 Section 1. Gross Domestic Product (GDP). National Income Accounting Look at ____________, income, investment, and savings Department of _____________. GDP. Defining GDP

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Economic Indicators and GDP

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  1. Economic Indicators and GDP Chapter 12 Section 1

  2. Gross Domestic Product (GDP) • National Income Accounting • Look at ____________, income, investment, and savings • Department of _____________

  3. GDP • Defining GDP • The ________ value of all final goods and services produced within a country’s borders in a given year • Dollar value – total cash value • Final _______ and Services – no intermediate goods • Produced within a country’s ____________ • In a given year – excludes resells (ex: cars)

  4. GDP • ________________ Approach • Consumer g&s • Durable and nondurable goods • business g&s • ______________ g&s • net exports • Exports - imports

  5. GDP • _________ Approach • Add up all the incomes in the economy minus the dollar value for the goods and services purchased from other firms (material costs) • In theory, Income and Expenditure Approach should give you the same total

  6. Nominal vs. Real GDP • ____________ GDP • GDP calculated in current prices • _________________ • GDP expressed in constant, or unchanging, prices • Use a ___________ year of prices to compare things, giving a more accurate depiction of the economy • Changes in ______________ should not affect GDP

  7. Limitations of GDP • Nonmarket Activities • The _______________ Economy • Negative ______________ • Quality of Life • More stuff = better life????

  8. Other Output and Income Measures • Gross National Product (GNP) • Annual income earned by a nation’s firms and citizens • Does not account for depreciation of capital equipment • Net National Product (NNP) • GNP – cost of depreciation • National Income (NI) • Personal Income (PI) • NI – reinvested profits, income taxes, SS taxes • Disposable Personal Income (DPI) • Money you have to spend after taxes

  9. Influences on GDP • Aggregate __________ • Supply curve for the entire economy • Compare ________ GDP (x-axis) and price level (y-axis) • Price level – the average of all prices in the economy • ______________ Demand • The amount of goods and services in the economy that will be purchased at all possible price levels

  10. Aggregate Supply and Demand

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