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Lecture 1

ECON 102 Lecture 1: Econ 102 – Lecture 1 – Measuring a Nation’s Income


Department
Economics
Course Code
ECON 102
Professor
Soren Lemche
Lecture
1

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Jan 08, 2016
Econ 102 – Lecture 1 – Measuring a Nation’s Income
GDP = aggregate economic activities = size of the overall
economy
1. Market Value
Planet X 2015 Price
Bread 1000 kg $2/kg
Scrap Metal 5000 tons $10/ton
GDP = (2 x 1000) + (10 x 5000) = $52000
2. Final Goods VS Intermediate Goods
Farmer  (wheat $30)  Miller  (4our $50)  Baker  (bread $100) 
Customer
Value added approach: 30 + (50 – 30) + (100 – 50) = 100
GDP is a 4ow variable
Quick Quiz: If GDP did not include an imputed rental value for
owner-occupied homes, a shift toward greater home-ownership
would:
oA) increase GDP
oB) decrease GDP
oC) not a<ect GDP
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