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Chapter 7- GDP Notes

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ECON 1115
Peter Simon

Chapter 7: Measuring Domestic Output & National Income 10/08/2013 (Used) Real GDP: The dollar value of all goods produced in a country at base year prices from the past (Not used) Nominal GDP: The dollar value of all goods produced in a country at current prices in one country in a given time GDP includes on the market value of final goods and ignores intermediate goods altogether. This is because the value of final goods already includes the value of all the intermediate goods that were used in producing them. Avoid multiple counting. Intermediate goods: products that are purchased for resale or further processing or manufacturing Final goods: products that are purchased by their end users Can avoid multiple counting by measuring and cumulating on the value added. Ex: The value added by firm B is $60, the difference between the $180 value of its output and the $120 it paid for the input from firm A. 3 ways to calculate GDP 1. Price x Quantity 2. I
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