ECON 1000 Chapter Notes - Chapter 5: Gdp Deflator
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Macroeconomics: the study of the economy as a whole. Gdp measures 2 things at once: the total income of everyone in the economy and the total e(cid:454)pe(cid:374)diture o(cid:374) the eco(cid:374)o(cid:373)(cid:455)"s output of goods a(cid:374)d ser(cid:448)ices. For a(cid:374) eco(cid:374)o(cid:373)(cid:455) as a (cid:449)hole, income must equal expenditure. This is true because every dollar of spending by some buyer is a dollar of income for some seller. Gross domestic product (gdp) is the market value for all final goods and services produced within a country in a given period of time. Y (gdp) is divided into 4 components: consumption ( c), investment (i), government purchases (g), and net exports (nx). Consumption is spending by households on goods and services. Goods include household spending on durable goods, such as automobiles and appliances. Investment is the purchase of goods that will be used in the future to produce more goods and services. It is the sum of purchases of capital equipement, inventories, and structures.