ECON 1100 Chapter Notes - Chapter 5: Gdp Deflator, Gross National Income, Gross Fixed Capital Formation

23 views3 pages

tanelephant924

7 Dec 2013

School

Department

Course

Professor

For unlimited access to Textbook Notes, a Class+ subscription is required.

Document Summary

Chapter 5: measuring economic activity: gdp and unemployment. Most common measure of an economies output = gdp (measures how much is made during a given period) Gdp: the market value of the final goods/services produced in a country given a specific period. Services provided by government employees is generally not market place therefore included in gdp. Goods/services produced by unpaid household labour for use within household (mowing the lawn) is not included in gdp. Summing all value added by all firms in the production process yields the value of the final good/service. Final goods or services: consumed by the ultimate consumer, b/c 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/services and therefore not counted in gdp. Value added: the market value of its product or service minus the cost of inputs purchased from other firms (revenues-cost of intermediate goods=value added)

Related Questions

Topic 1: GDP and Its Limitations

The national income accounts measure productivity, spending, and income; but these accounts were not designed to measure economic welfare. GDP only measures the value of marketed goods and services for a country during a given period of time. Goods and services that are not sold in markets, such as food produced and consumed at home and household articles, are not included in GDP. Discuss aspects of economic welfare ignored in GDP measurement.

Discussion Checklist:

A.) What are the limitations of the GDP in measuring total output and national welfare?

B.) What products (goods and services) are excluded from the GDP computation?

C.) What are the impacts of the shortcomings of the GDP as a measure of the national product and national welfare?

ochrewolf599

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 1100 Chapter Notes - Chapter 5: Gdp Deflator, Gross National Income, Gross Fixed Capital Formation

Document Summary

Get access

Related Documents

ECON 1100 Chapter Notes - Chapter 5: Gross Domestic Product, Gross National Income

ECON 1100 Study Guide - Midterm Guide: Loanable Funds, Nominal Interest Rate, Real Interest Rate

ECON 1100 Study Guide - Midterm Guide: Longrun, Aggregate Supply, Bankrate

Related Questions