SS 141 Lecture Notes - Lecture 3: Income Approach, Black Market
Document Summary
Chapter 7: measuring domesic output and naional income. Approaches to gdp expenditures approach income approach nominal gdp vs real gdp. Short comings of gdp: assessing the economy"s performance. Naional income accouning measures economy"s overall performance. Bureau of economic analysis complies naional income and product accounts: assess health of economy, track long run course, formulate policy, gross domesic product (gdp) Avoid muliple couning: market value inal goods b, count value added. Ignore intermediate goods exclude inancial transacions: public transfer payments, private transfer payments c. stock market transacions exclude second hand sales a. ie: sell a used car to someone, two approaches to gdp. Income approach: count income derived from producion, wages, rental income, interest income proit. Expenditure approach: count sum of money spent buying the inal goods. If the country has no money they aren"t spending: how much money was spent (refer to chart, nominal gdp vs. real gdp. Gdp is a dollar measure of producion.
