EC 302 Lecture Notes - Lecture 2: Black Market, Inventory Investment, Resource Depletion
Document Summary
Ec302 lecture 1 the measurement and structure of the national. National income accounts: an accounting framework used i measuring current economic activity, the most important one is gdp. Product approach: the amount of output produced. Expenditure approach: the amount of spending by purchasers. Expenditure approach: 10000+40000 = 50000 ( both numbers are generated by the public) (ignore 25000 because juice company is not a final consumer) Any output produced(produced approach) is purchased by someone (expenditure approach) Gdp (gross domestic product) is the market value of final good and services newly produced within a national during a fixed period of time. Market value: allows adding together unlike items by valuing them at their market prices. Problems: misses nonmarket items such as homemaking, the value of environmental quality, and natural resource depletion. There is some adjustment to reflect the underground economy. Government services (that aren"t sold in markets) are valued at their cost of production)
