ECON 4710 Lecture Notes - Lecture 1: Physical Capital, Perfect Competition
Document Summary
National income accounting: method of aggregating the production of diverse goods into a single measure of overall economic activity. National accounting: state of an economy at a given time, changes to an economy over time, differences across countries. Gdp: the market value of the final goods and services produced in an economy over a certain period. 3 measures of gdp: expenditure measure: all the money spent on goods in the economy. Income measure: all the income earned in the economy: production measure: the number of goods produced in the economy. Economic profits: above normal returns associated with prices that exceed those that prevail under perfect competition. I= investment (ex: equipment that does not get used up in production: social security payments are not included because they are transfer payments (they move from one person to another) Nx= net exports (exports-imports: consumption and investment include imports so it is subtracted at the end, can be negative.