9I National Accounts

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Department
Economics
Course
ECO102H1
Professor
Gustavo Indart
Semester
Summer

Description
NATIONAL ACCOUNTS Gross Domestic Product (GDP): total value of final goods and services produced in the economy during a given period. GDP is a flow of new products during a period of time There are three different approaches to measure GDP: 1) Production Approach: measures value added in the production of goods and services in different industries. The value added by a firm is the difference between the revenue the firm earns by selling its product and the amount it pays for the product of other firms it uses as intermediate goods 2) Expenditure Approach: measures total expenditure on final goods and services by different groups (households, business, government, and foreigners) GDP = C + I + G + (X - IM) C = consumption expenditures of households I = investment in plant and equipment, residential construction, inventory accumulation G = government pur
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