Textbook Notes (369,082)
Canada (162,376)
Economics (818)
ECON 1100 (224)
Chapter 5

Chapter 5 GDP and Unemployment

2 Pages

Course Code
ECON 1100
Eveline Adomait

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Chapter 5: GDP and Unemployment Thursday, January 17, 20135:52 PM 5.1 Gross Domestic Product: Measuring the Nation's Output Definitions Gross Domestic Product (GDP)- the market value of the final goods and services produced in a country during a given period Final Goods or Services- consumed by the ultimate user; because they are the end products of the production process, they are counted as part of GDP Intermediate Goods or Services- used up in the production of final goods and services and therefore not counted as part of GDP Value Added- for any firm, the market value of its product or service minus the cost of inputs purchased from other firms 5.2 The Expenditure Method for Measuring GDP Definitions Consumption- spending by households on goods and services, such as food, clothing and entertainment - Four Categories: Durable Goods, Semi-Durable Goods, Non-Durable Goods and Services Private Sector Investment- spending by firms on final goods and services, primarily capital goods and housing - Three Categories: Non-Residential , Residential Structure Government Purchases- purchases by federal, provincial, and municipal governments of final goods and services; does not include government transfer payments or interest paid on public debt Two Categories: Net Government Current Expenditure on Goods and Services (office supplies, government employees, warships, etc.), Government Gross Fixed Capital Formation (buildings, airports, etc.) Net Investment- investment that adds to the total capital stock of the economy Net Export- exports minus imports 5.3 GDP and The Incomes of Capital and Labour Components of GDP in Terms of Income 1) Wages, salaries, and supplementary labour 2) Corporate and like profits before taxes
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