ECON-1007EL Chapter Notes - Chapter 5: Gross Domestic Product, Net Domestic Product, Dental Floss
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30 Jan 2017
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The most commonly used measure of an economy"s output is called the gross domestic product (gdp) Gross domestic profit (gdp) the market value of the final goods and services produced in a country during a given period. A modern economy produces many different goods and services, from dental floss to acupuncture . To be able to talk about total output as opposed to the output of specific items, economists need to aggregate the quantities of many different goods and services into a single number. We have a ready means of adding them up if they are exchanged for money, and these are called market prices. If we know the market prices of the different outputs, then the total gdp is equal to the weighted-output: Example: (4 mil apples x 0. 25) + (6 mil pears x 0. 50) + (3 mil shoes x ) = million.
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