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Lecture

# ECON 102 Lecture Notes - Walmart Canada, Net Income, Final Good

Department
Economics
Course Code
ECON 102
Professor
Angela Trimarchi

This preview shows pages 1-3. to view the full 38 pages of the document.
Chapter 5: Measuring a Nation’s Income
Gross Domestic Product – GDP
oIt is the market value of all final
goods and services produced
o(And income earned) within a country
oIn a given period of time (such as a
year)
5-1

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Important Facts about GDP:
oGDP is basically a production concept
oGDP is a flow variable (define flow
variable) (measure a year or over)
oMarket Value – See example below
oIn the national accounts, firms and the
government are the units which produce
output in the domestic economy
oGDP includes only final goods not
intermediate goods (parts of the product)
(final goods = goods will not sell to
anyone else)
P.S. Second hand goods will not count since it already
recorded when it first time produced
5-2

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Example:
Item Price Quantity
CDs \$15 1000
Tapes \$ 5 2000
oCalculate GDP by multiplying P * Q for
each good and then adding your results together
oGDP = P*Q (then add the
results)
o= (\$15*1000)+(\$5*2000) =
\$25000
5-3
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