ECON 1B03 Chapter Notes - Chapter 5-6: Gross Domestic Product, Gdp Deflator, State-Owned Enterprise
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ECON 1B03 Full Course Notes
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Microeconomics is the study of how individual households and firms make decisions and how they interact with one another in markets. Macroeconomics is the study of the economy as a whole. Gdp measures two things at once: the total income of everyone in the economy and the total expenditure on the economy"s output of goods and services. Gdp can perform the trick of measuring both total income and total expenditure because these two things are really the same. For an economy as a whole, income must equal expenditure. We can compute it for this economy in one of two ways: by adding up the total expenditure by households or by adding up the total income (wages, rent, and profit) paid by firms. Gross domestic product (gdp) is the market value of all final goods and services produced within a country in a given period of time.