[ECON 2] - Final Exam Guide - Everything you need to know! (37 pages long)
Document Summary
Luxuries: nice to have but not need to have. Microeconomics: study of how individual households and rms make decisions, interact with one another in market. Macroeconomics: study of economy as a whole. Gross domestic product (gdp): measures total income of society, measures total expenditure on the economy"s output of goods/services, income = expenditure. Circular-flow diagram: illustrates gdp as spending, revenue, factor payments, and income, example page 5-8 in notes. Gdp: market value of all nal goods/services produced within a country in a given time: market value: goods valued at their market prices. All goods measured in the same units. Components of gdp: total spending (y) = c + i + g + nx. Nominal gdp: values output using current prices (in ation affects) Real gdp: values output using the prices of a base year (corrected for in ation) Gdp de ator: 100% x (nominal gdp / real gdp: measure of the overall de ation.
