EC140 Chapter Notes - Chapter 20: Potential Output, Environmental Quality, Black Market
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EC140 Full Course Notes
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The market value of the final goods and services produced within a country in a given time period. The price at which items are traded in markets. By using market prices to value production, we can add apples and oranges together two items that are not similar. A final good is an item that is bought by its final user during a specified time period. It contrasts with an intermediate good, which is an item that is produced by one firm, bought by another firm, and used as a component of a final good or service. Ex. a ford truck is a final good, but a good wrench tire on it is an intermediate good. The value of the truck already included the value of the tires. Some items people buy are neither final goods nor intermediate goods and they are not part of gsp. Examples of such items include financial assets - stocks and bonds, and second-hand goods.