CAS EC 202 Lecture Notes - Lecture 1: Deflation, Phillips Curve
Document Summary
National income and product accounts were developed at the end of. World war ii as measures of aggregate output. The measure of aggregate output is called gross domestic product (gdp). Gdp is the value of final goods and services produced in the economy during a given period. We want to count only final goods, not intermediate goods. Gdp is the sum of value added in the economy during a given period. The value added by a firm is the value of its production minus the value of the intermediate goods used in production. Gdp is the sum of incomes in the economy during a given period. Aggregate production and aggregate income are always equal. Nominal gdp is the sum of the quantities of final goods produced times their current price. increases for two reasons: Real gdp is the sum of quantities of final goods times constant (not current) prices. Employment is the number of people who have a job.