ECON 1BB3 Lecture Notes - Lecture 4: Gdp Deflator, Intermediate Good

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ECON 1BB3 Full Course Notes
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ECON 1BB3 Full Course Notes
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Econ 1bb3: introductory macroeconomics lecture 4 measuring a nation"s. Defined as: the market value of all final goods and services produced in a country in a given period of time. It is a measure of how much stuff we make. Calculated by adding up the [price x quantity] over all goods and services produced in a given year. Market value: gdp adds together many different kinds of products into a single measure of the value of economic activity using market prices. Because market prices measure the amount people are willing to pay for different goods, they reflect the market value of those goods. Example: if the price of an apple is twice the price of an orange, then an apple contributes twice as much to gdp as does an orange. Of all: gdp tries to be comprehensive, but it includes all items produced in the economy and sold legally in markets. Most items produced and consumed at home are excluded.

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