EC 111 Study Guide - Midterm Guide: Loanable Funds, Business Cycle, Nominal Interest Rate
10 Apr 2017
School
Department
Course
Professor
Document Summary
An economy"s income is the same as its expenditure because every transaction has two parties: a buyer and a seller: every dollar of spending by some buyer is a dollar of income for some seller. Y = c + i + g + nx: Gross domestic product(gdp) = consumption + investment + government purchases + net. Macro-econ 111-006 test 2: net exports: spending on domestically produced goods by foreigners(exports) minus spending on foreign foods by domestic residents(imports) Gdp is a good measure of economic well-being because people prefer higher to lower incomes. But it is not a perfect measure of well-being. For example, gdp excludes the value of leisure and the value of a clean environment: the level of real gdp is a good gauge of economic prosperity, and the growth of real. Gdp is a good gauge of economic progress.
