ECON 2 Lecture Notes - Lecture 2: Gross Domestic Product, Gdp Deflator, Final Good
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ECON 2 Full Course Notes
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Real and nominal gdp measure productivity in terms of quantity real gdp: accounts for change in price. Gdp deflator nominal: measure in that year"s prices real: measure in a base year"s prices (accounts for price inflation) Gdp and the circular flow of income and expenditures circular flow of income and expenditures circular flow of goods and services. Gdp = total expenditures, total income, or total revenue parsing gross domestic product (gdp) Gdp = household expenditure = firm revenue = firm expenses + profit = household income. Gross domestic product: the market value of all final goods and services produced within a country in a given period. All: does not include illegal things, things produced in the household and consumed in the household. Final: makes sure to not count values extra times, does not count intermediary goods, count final good in gdp. Components of gdp investment and consumption everyday economic investment future gain (house, bond.