ECON 20a Lecture Notes - Lecture 2: Final Good, Intermediate Good

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Is the total value of all during a given period , . Gdp is computed as the value of output - market prices are. Gdp = revenue of apple growers + revenue of apple used to compute the dollar value of apples and oranges producers. Is a good sold to its final user. Many firms produce goods that go through subcontractors. Is a good purchased so that it can be used in the production. An intermediate good of the final good. Ex. an engine, a transmission, a battery. If we count intermediate goods, then we are double counting because it is also included in the final good. Stocks and bonds are not included since they are financial claims, not goods and services produced with real resources. Also, transfer payments, social security, are not include. If they spend the money then it counts. With a few exceptions, gdp includes only goods produced with.

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