ECN 204 Chapter Notes - Chapter 5: Net Domestic Product, Income Approach, Stock Market

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carminedog937

23 Apr 2011

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Document Summary

The total market value of all final goods and services produced annually within the boundaries of canada. assess the health of the economy by comparing levels of productions at regular intervals. Track the long-run course of the economy to see whether it has grown, been constant, or declined. Formulate policies that will maintain and improve the economy"s health. To avoid multiple counting, only final goods and services are counted. Final goods: goods and services purchased for final use and not for resale or further processing or manufacturing. Intermediate goods: products purchased for resale or further processing or manufacturing. The value of final goods includes the value of all intermediate goods used in producing them. Two types of non-production transactions: financial transactions. public transfer payments ex: welfare, employment insurance. stock market transactions ex: swapping bits of paper on the stock market: second-hand sales. Two ways of calculating gdp: expenditure and income approach:

Related Questions

Intermediate goods are goods and services that are purchased for resale or for further processing or manufacturing. Final goods are consumer goods, capital goods, and services that are purchased by their final users, rather than for resale or for further processing or manufacturing. Including the value of intermediate goods in the measure of real GDP would amount to multiple counting, and therefore distort the value of GDP. Value added is the market value of a firm’s output less the value of the inputs the firm has bought from others.

Using the table below, calculate the total sales values, value-added, and fill in the missing boxes. The product is assembled for sale is a fancy wool suit.

Stages of Production	Sales Value of Materials or Product	Value Added
	$0
Firm A: Sheep Ranch		$120
Firm B: Wool Processor	$180
Firm C: Suit Manufacturer	$220
Firm D: Clothing Wholesaler		$50
Firm E: Retail Clothier (Market)		$80
Total Sales Value
Total Value Added