ECO 001 Lecture Notes - Lecture 3: Net Domestic Product, Final Good, Nanny
15 Jun 2018
School
Department
Course
Professor
Economics Lesson 3: GDP
Jadzia Wray
1.) Measuring Economics Performance – GDP
a. Gross Domestic Product – total amount of stuff that a country makes in
a given year.
i. Gross – bigger number – total money
ii. Domestic – this country
iii. Product – stuff we make
Gross Paycheck – took taxes and stuff out – a lot less money you get
Net Paycheck – is net domestic product – without stuff taken out
We make $17 trillion of stuff. China makes $9 trillion of stuff. We have
more than China because of a thing called GN(national)P – it doesn’t
matter who owns the company – it’s where the thing is made. If we make
a factory in China, then it counts towards China’s GDP. We don’t care
who buys it or owns it.
. We track GDP so that we can track economic activity and make sure
people don’t lost jobs in the future. Tells you how well the economy is
doing.
2.) GDP – Final Goods, Secondhand Sales and Avoidance of Multiple Counting
a. Final Goods: what you get in the end. The final product.
Ex: pizza is the final good. Dough and sauce aren’t final goods.
Can’t count sauce and the pizza because then you are counting
sauce twice. Intermediate goods – sauce, dough and cheese.
b. Secondhand Sales: Don’t count used stuff because it was already
counting.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Measuring economics performance gdp: gross domestic product total amount of stuff that a country makes in a given year, gross bigger number total money, domestic this country, product stuff we make. Gross paycheck took taxes and stuff out a lot less money you get. Net paycheck is net domestic product without stuff taken out. We have more than china because of a thing called gn(national)p it doesn"t matter who owns the company it"s where the thing is made. If we make a factory in china, then it counts towards china"s gdp. We don"t care who buys it or owns it. We track gdp so that we can track economic activity and make sure people don"t lost jobs in the future. Tells you how well the economy is doing. Gdp final goods, secondhand sales and avoidance of multiple counting: final goods: what you get in the end. Can"t count sauce and the pizza because then you are counting sauce twice.
