EC140 Lecture Notes - Disposable And Discretionary Income, Xml Database, Gdp Deflator
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EC140 Full Course Notes
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Production occurs in stages- most firms produce outputs that are other firms inputs: intermediate products, final products. Each firm"s contribution to total output is its valued added. Value added = revenues non-labour costs. Summing value added avoids the problem of double counting when measuring total output. Total value added in the economy is called gross domestic product (gdp) Three methods for measuring national income (output): total value added from domestic production, total expenditures on domestic output, total income generated by domestic production. Because of the circular flow of income, these three measures yield the same total gdp. Consider adding up the expenditures needed to purchase the final output produced in any given year. There are four broad expenditure categories: consumption, investment, government purchases, net exports, inventories, plant and equipment, residential hosing. Actual consumption expenditure (ca) includes expenditure on all final goods. Actual investment expenditure (ia) is expenditure on the production during the year. of goods not for present consumption, including:
