ECON102 Lecture Notes - Lecture 3: Tim Hortons, Gross Domestic Product, Final Good

• School: University of Waterloo
• Department: Economics
• Course: ECON102
• Professor: Joseph Dejuan

Document Summary

The market value of all final goods and services produced in a country in a given time period. Good and services are valued at their market prices. An item bought by its final user during a specified time period. Contrasts with an intermediate good, which is an item that is produced by one firm, bought by another firm, and used as a component of a final good or service. Excluding the value of intermediate goods and services avoids counting the same value more than once. Gdp measures production within a country"s borders -- domestic production. Gdp measures production during a specific time period, normally a year or a quarter of a year. Gdp and the circular flow of expenditure and income. Gdp measures the value of production, which also equals total expenditure on final goods and total income. The circular flow diagram illustrates the inequality of income and expenditure. The circular flow shows 2 ways of measuring gdp.