ECN 204 Study Guide - Midterm Guide: Opportunity Cost, Michael Kremer, Virtuous Circle And Vicious Circle

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30 Apr 2012
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The study of how individual households and firms make decisions, interact with one another in markets. The study of the economy as a whole. We begin our study of macroeconomics with the country"s total income and expenditure. Gross domestic product (gdp) measures total income of everyone in the economy. Gdp also measures total expenditure on the economy"s output of goods and services (g&s) For the economy as a whole, income equals expenditure because every dollar a buyer spends is a dollar of income for the seller. A dollar spent is a dollar earned. Gdp is our measure of the economy"s total income, often called national income . Gdp also measures total expenditure on the goods and services produced in the economy, and the value of the economy"s output (production) of goods and services, gdp is also referred to as output .