ECN 211 Study Guide - Midterm Guide: Business Cycle, Market Power, Structural Unemployment

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Gdp measures 2 things: total income of everyone in the economy, total expenditure on the economy"s output of goods and services, for an economy: income must equal expenditure. Income = expenditure because every transaction has a buyer and a seller: all expenditure ends up being someone"s income. It excludes any products produced or consumed at home: vegetables bought from the grocery store are apart of gdp, vegetables grown in your garden at home are not apart of gdp, marriage reduces gdp. Intermediate: paper: final: card, gdp only measures the value of nal goods, tangible vs. intangible goods, tangible: food, clothing, etc. Intangible: haircuts, housecleaning, doctor visits: goods vs. services, good: paying for a cd, service: paying to hear a concert, gdp only includes goods and services produced now not in the past, only measures in con nement of a country. Y = c + i + g + nx. Gdp goes up, other measures of income go up.

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