Textbook Notes (363,260)
Canada (158,278)
Economics (923)
ECN 204 (281)
Chapter 5

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Ryerson University
ECN 204
Christos Shiamptanis

CHAPTER 5 MEASURING A NATION’S INCOME The Measurement of Gross Domestic Product • GDP: the market value of all final goods and services produced within a country in a given period of time • Sum of all incomes OR expenditures (same look at pg 98) Goods are valued at their market prices, so: • All goods measured in the same units (e.g., dollars in Canada) • Things that don’t have a market value are excluded, e.g., housework you do for yourself. • Final goods: intended for the end user GDP only includes final goods – they already embody the value of the intermediate goods used in their production. • GDP includes tangible goods (like DVDs, mountain bikes, beer)& intangible services (dry cleaning, concerts, cell phone service). • GDP includes currently produced goods, not goods produced in the past. • Usually a year or a quarter (3 months) THE COMPONENETS OF GDP • To understand how the economy is using its scarce resources  study the composition of GDP amongst various forms of spending • Four components: Consumption (C) Investment (I) Government Purchases
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