ECON 149 Lecture 1: econ_uci_

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erinleopard224

23 Jun 2020

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Def: gross domestic product (gdp) the market value of all final goods and services produced within a country in a given period of time. Market value is calculated by using prices (recorded sales price) Gdp includes all items produced and sold legally in the economy. The value of housing services is somewhat difficult to measure. If a house is rented, the value of the rent is used to measure the value of housing services. For housing that is owned (mortgaged), the government estimates the rental value and uses this figure to value housing services. Gdp does not include illegal goods or services or items that are not sold in markets. When you hire someone to mow your lawn, that production is counted in the gdp. If you mow your own lawn, that production is not included in the gdp. Intermediate goods (goods to be used as a component in another good) are not included in the gdp.

Related Questions

7. The difference between nominal GDP and real GDP is that nominal GDP:

	A.	measures a country's production of final goods and services at current market prices, whereas real GDP measures a country's production of final goods and services at the same prices in all years.
	B.	is measured in dollar terms, whereas real GDP is measured in terms of numbers of goods and services produced
	C.	measures the total value of only final goods and services, whereas real GDP measures the value of all goods and services, both intermediate and final
	D.	measures a country's production of final goods and services at fixed prices, whereas real GDP measures a country's production of all final goods and services at current market prices

carminekoala560

Topic 1: GDP and Its Limitations

The national income accounts measure productivity, spending, and income; but these accounts were not designed to measure economic welfare. GDP only measures the value of marketed goods and services for a country during a given period of time. Goods and services that are not sold in markets, such as food produced and consumed at home and household articles, are not included in GDP. Discuss aspects of economic welfare ignored in GDP measurement.

Discussion Checklist:

A.) What are the limitations of the GDP in measuring total output and national welfare?

B.) What products (goods and services) are excluded from the GDP computation?

C.) What are the impacts of the shortcomings of the GDP as a measure of the national product and national welfare?

ochrewolf599

1. What does the investment component of GDP measure?

a. spending by households on goods and services

b. spending by government agencies on goods and services

c. spending on goods to be used in future production

d. spending on domestically produced goods by foreign buyers

2. A good produced in the current time period but put into a firm's inventory instead of being sold

a. is only included as a part of consumption in future GDP when it is sold.

b. is counted as consumption in the current GDP since it was produced in the current time period.

c. is excluded from the current GDP.

d. is considered unsold inventory and counted as a part of the investment in current GDP.

burgundycrow837

ECON 149 Lecture 1: econ_uci_

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