ECON20001 Lecture 1: Introduction

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orchidgnu53

27 Jul 2018

School

University of Melbourne

Department

Economics

Course

ECON20001

Professor

Dong

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Document Summary

Aggregate output: measures aggregate economic activity, generally measured in national income accounts. National income accounts: accounting system, records an economy"s production and income, used to measure aggregate economic activity. Aggregate output can be measured from either the production or income side: gross domestic product (gdp, gross domestic income (gdi, gdp = gdi, by construction. Gdp/gdi are flow variables (cid:373)easu(cid:396)e e(cid:272)o(cid:374)o(cid:373)i(cid:272) a(cid:272)ti(cid:448)it(cid:455) (cid:449)ithi(cid:374) a (cid:272)e(cid:396)tai(cid:374) pe(cid:396)iod (e. g. ) yearly, quarterly. Th(cid:396)ee (cid:449)a(cid:455)s to (cid:373)easu(cid:396)e agg(cid:396)egate output i(cid:374) the e(cid:272)o(cid:374)o(cid:373)(cid:455) du(cid:396)i(cid:374)g a gi(cid:448)e(cid:374) pe(cid:396)iod, gdp is the: Total value of the final goods and services produced. Total value-added the e(cid:454)t(cid:396)a (cid:448)alue (cid:271)(cid:396)ought du(cid:396)i(cid:374)g ea(cid:272)h stage of p(cid:396)odu(cid:272)tio(cid:374) Notes: all 3 methods will give the same value for aggregate output, valuation at market price, used to add different goods, (cid:1868)(cid:1867)(cid:1856)(cid:1873)(cid:1855)(cid:1872)(cid:1867)(cid:1866) (cid:1868)(cid:1855)(cid:1857) wellbeing, gdp only measures agg(cid:396)egate e(cid:272)o(cid:374)o(cid:373)i(cid:272) a(cid:272)ti(cid:448)it(cid:455) (cid:374)ot e(cid:395)ui(cid:448)ale(cid:374)t to sta(cid:374)da(cid:396)d of li(cid:448)i(cid:374)g o(cid:396) Sum of quantities times current prices: where prices denominated in dollars.

Related Questions

Gross Domestic Product (GDP) only measures the value of marketed goods and services for a country during a given period of time.

Is the GDP measure underestimating or overestimating national production and total income in the economy? Why?

What are the limitations of the GDP in measuring total output and national welfare? What products (services) are excluded from the GDP computation?

ambergnu461

Topic 1: GDP and Its Limitations

The national income accounts measure productivity, spending, and income; but these accounts were not designed to measure economic welfare. GDP only measures the value of marketed goods and services for a country during a given period of time. Goods and services that are not sold in markets, such as food produced and consumed at home and household articles, are not included in GDP. Discuss aspects of economic welfare ignored in GDP measurement.

Discussion Checklist:

A.) What are the limitations of the GDP in measuring total output and national welfare?

B.) What products (goods and services) are excluded from the GDP computation?

C.) What are the impacts of the shortcomings of the GDP as a measure of the national product and national welfare?

ochrewolf599

An improvement in technology causes the production possibilities frontier (PPF) to

	shift to the right.
	pivot upward.
	shift to the left.
	pivot downward.

(7)

Which of the following is not shown by the circular flow model?

	The flow of resources in one direction and money in the other
	The equality of aggregate spending and aggregate income
	The interaction of households, firms, and the government
	The total amount of goods and services the economy can produce

(8)

Gross domestic product (GDP) is defined as

	the market value of all final goods and services produced in an economy in a given period of time.
	the market value of all consumption goods and services produced in an economy in a given period of time.
	the market value of all investment goods and services produced in an economy in a given period of time.
	the real value of all investment goods and services produced in an economy in a given period of time.

(9)

Real GDP

	includes all domestic and foreign transactions.
	includes the dollar value of domestic transactions only.
	tries to isolate the effect of changing output, holding prices constant.
	measures GDP in terms of prices of goods and services produced.

(10)

When economists talk about economic growth, they are usually referring to

	the percentage change in nominal GDP.
	the percentage change in real GDP.
	the percentage change in nominal investment.
	the percentage change in real investment.

chocolateant769

ECON20001 Lecture 1: Introduction

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