ECN 600 Chapter Notes - Chapter 2: Gross Domestic Product, Income Approach, Weighted Arithmetic Mean

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Gdp is published on a quarterly bases as part of the national income and product. Accounts (nipa): gross domestic product (gdp) the dollar value of final output produced. Intermediate goods a good that is produced and then used as an input to: three approaches of measuring gdp; product approach, expenditure approach, and the income approach. another production process. If we did not subtract the value of intermediate goods used in production, then we would be double counting. In the expenditure approach, we calculate gdp as total spending on all final goods and services production in the economy. We do not count spending on intermediate goods: total expenditure = c + i + g + nx. The income approach: to calculate gdp using the income approach, we add up all income received by economic agents contributing to production. Depreciation is taken out when we calculate profits, and so it needs to be added in again when we compute gdp.

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