Textbook Notes (368,432)
Canada (161,877)
Economics (923)
ECN 204 (282)
Chapter 5

Chapter 5

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ECN 204
Christos Shiamptanis

ECN 204 Chapter 5Measuring a Nations IncomeTHE ECONOMYS INCOME AND EXPENDITUREGDP measure 2 things The total income of everyone in the economyThe total expenditure on the economys output of goods and servicesFor an economy as a whole income must equal expenditureIn an economy every dollar spent by a buyer is income for a sellerTotal incometotal expenditure theyre the sameTHE MEASUREMENT OF GROSS DOMESTIC PRODUCTGross Domestic Product GDP The market value of all final goods and services produced within a country in a given period of timeMeasures Market value of goodsservices based on open market pricesMust be final goods not intermediate or else it would be counted twiceGoodsservices carshaircutsMust be produced domestically and help countryStats produced in a certain period of time quarterly seasonally adjustedTHE COMPONENTS OF GDPEach dollar of expenditure must be in 1 of the 4 categoriesY GDPC ConsumptionI InvestmentG Govt PurchasesNX Net ExportsConsumption Spending by households on goods and services with the exception of purchases of new housingInvestment Spending on capital equipment inventories and structures including household purchases of new housingGovernment Puchases Spending on goods and services by local territorial provincial and federal governments doesn
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