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[ECON 1012] - Final Exam Guide - Everything you need to kno..
[ECON 1012] - Final Exam Guide - Everything you need to know! (57 pages long)

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George Washington University
ECON 1012
Terrell Henry

[ECON 1012] Comprehensive Final Exam guide including any lecture notes, textbook notes and exam guides.Principles of Economics II, Lecture 1 1/17/17 Measuring GDP and Economic Growth Gross Domestic Product  GDP is the market value of all final goods and services produced in a country in a given time period o Market value- goods and services are valued at their market prices; add together all apples, oranges, computers, and popcorn o Final goods and services- a final good is an item bought by its final user during a specified time period  The opposite is an intermediate good- item that is produced by one firm and bought by another to be used as a component of a final good or service- exclude intermediate goods with GDP o Produced within a country aka domestic production o In a given time period- usually measured in a year or a quarter of a year  GDP measures the value of production, = total expenditure on final goods and total income o Equality of income and value of production shows the link between productivity and living standards o Standard of living rises when income rises  Households and Firms o Households sell, and firms buy the services of labor, capital and land--- factor markets o Firms pay wages for labor, interest for capital, and rent for land o Entrepreneurship receives profit o Firms sell and households buy consumer goods--- goods market o Consumption expenditure- total payments for consumer goods o Investment- purchase of a new plant, add capital equipment  Governments o Buy goods and services from firms o Their expenditure is called government expenditure o Finance expenditure with taxes and make financial transfers to househlds- Social Security benefits  Rest of the World o Exports- Us sells goods and services to the rest of the world o Imports- US buy goods and services from the rest of the world o Value of exports (X) minus the value of imports (M) is NET EXPORTS  If positive- net flow is from US to the world  If negative- net flow is from the world to the US  GDP Equals Expenditure Income o GDP can be measured two ways  Total expenditure on goods and services  Total income earned producing goods and services o Aggregate expenditure equals consumption expenditure plus investment plus government expenditure plus net exports o Y = C+ I + G+ X-M
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