ECN 204 Chapter 5: Chapter 5

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Ecn 204: chapter 5 -- measuring a nations income. Gdp measure 2 things: -the total income of everyone in the economy s output of goods and services. For an economy as a whole, income must equal expenditure. In an economy, every dollar spent by a buyer is income for a seller. Total income = total expenditure, they"re the same. Gross domestic product (gdp): the market value of all final goods and services p roduced within a country in a given period of time. Measures: -market value of goods & services based on open market prices. Must be final goods, not intermediate or else it would be cou nted twice. Stats produced in a certain period of time, quarterly, season ally adjusted. Each dollar of expenditure must be in 1 of the 4 categories. Y (gdp) = c (consumption) + i (investment) + g (gov"t purchases) + nx (net expor ts)

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