ECO 1001 Lecture Notes - Lecture 4: Gross Domestic Product, Final Good
22 Sep 2016
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Definition: the total market value of final goods and services produced in one year within national boundaries. Excludes: transfer payments (social security, unemployment payments, stock purchases, etc. , used goods (because they would be counting for a second time in gdp, bartering among friends and/or family, work done by oneself (ex. Intermediary goods-goods used in the production of a final good. If these were counted they would be counted twice. Was replaced by gdp as the measure of economic growth for the country. Measured all products made by the citizens of a county, even if they live or work abroad. Didn"t include contribution of foreign citizens in the country. *key concept: there are two sides to every transaction* If we measure only the expenditure side of the transaction, this is called the expenditure. If we measure only the income side of the transaction, this is called the income approach. Gdp = c + i + g + x.
