ECON 1BB3 Chapter Notes - Chapter 5: Canada Pension Plan, Gdp Deflator, Transfer Payment

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graybeetle998

17 Sep 2017

School

McMaster University

Department

Economics

Course

ECON 1BB3

Professor

Bridget O' Shaughnessy

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ECON 1BB3 Full Course Notes

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This chapter considers gross domestic product (gdp) which measures the total income of a nation. Total expenditure on economy"s output of goods and services. For an economy as a whole, income must equal expenditure. Gdp is based on the assumption that the owner, in effect, pays rent to himself, so the rent is included both in his expenditure and in his income. Gdp excludes most items produced and sold illicitly such as illegal drugs. Vegetables you buy at the grocery store are part of gdp; vegetables you grow in your garden are not. When karen pays doug to mow her lawn, that transaction is part of gdp. If karen were to marry doug, doug"s service is no longer sold in a market and gdp falls. final: gdp includes only the value of final goods. Produced: gdp includes goods and services currently produced. It does not include transactions involving items produced in the past.

Related Questions

Which of the following statements about GDP is correct

A) Money continuously flows from households to firms and then back to households, and GDP measures this flow of money

B) 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.

C) While not perfect, GDP is generally regarded as the best single measure of a society’s economic well-being.

D) All of the above are correct.

emeraldmarten620

Gross Domestic Product (GDP) only measures the value of marketed goods and services for a country during a given period of time.

Is the GDP measure underestimating or overestimating national production and total income in the economy? Why?

What are the limitations of the GDP in measuring total output and national welfare? What products (services) are excluded from the GDP computation?

ambergnu461

An improvement in technology causes the production possibilities frontier (PPF) to

	shift to the right.
	pivot upward.
	shift to the left.
	pivot downward.

(7)

Which of the following is not shown by the circular flow model?

	The flow of resources in one direction and money in the other
	The equality of aggregate spending and aggregate income
	The interaction of households, firms, and the government
	The total amount of goods and services the economy can produce

(8)

Gross domestic product (GDP) is defined as

	the market value of all final goods and services produced in an economy in a given period of time.
	the market value of all consumption goods and services produced in an economy in a given period of time.
	the market value of all investment goods and services produced in an economy in a given period of time.
	the real value of all investment goods and services produced in an economy in a given period of time.

(9)

Real GDP

	includes all domestic and foreign transactions.
	includes the dollar value of domestic transactions only.
	tries to isolate the effect of changing output, holding prices constant.
	measures GDP in terms of prices of goods and services produced.

(10)

When economists talk about economic growth, they are usually referring to

	the percentage change in nominal GDP.
	the percentage change in real GDP.
	the percentage change in nominal investment.
	the percentage change in real investment.

chocolateant769

ECON 1BB3 Chapter Notes - Chapter 5: Canada Pension Plan, Gdp Deflator, Transfer Payment

ECON 1BB3 Full Course Notes

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