ECON 2010 Study Guide - Quiz Guide: Intermediate Good, Government Spending, Nominal Interest Rate
Document Summary
Within every economy, certain industry sectors or regions may experience their own cycles. Because with increased output comes increased employment and wages allowing for greater access to goods and services. A firm would report how much it sold to consumers and how much it sold to producers (intermediate goods): follow the value added approach. Value added is the increase in value that a firm contributes to a product or service. Value added by a used car dealer. Gnp is output produced by a country"s citizens: gnp = gdp + net foreign factor income. Refers to goods and services people produce themselves: the underground economy. Pbase year x qcurrent year: nominal gdp the value of final goods and services (p x q) of a given year using same year prices. If the effects of price increases inflation are not taken into account, then aggregate output value will not mean the same thing across years.
