Economics 1022A/B Chapter Notes - Chapter 4: Real Wages, Loanable Funds, Government Budget Balance

• School: Western University
• Department: Economics
• Course: Economics 1022A/B
• Professor: Prof

Document Summary

Define gdp and distinguish between a final good and an intermediate good. Gdp is the market value of all the final goods and services produced within a country in a given time period. A final good or service is an item that is sold to the final user, that is, the final consumer, government, a firm making investment, or a foreign entity. An intermediate good or service is an item that is produced by one firm, bought by another firm, and used as a component of a final good or service. For instance, bread sold to a consumer is a final good, but wheat sold to a baker to make the bread is an intermediate good. Distinguishing between final goods and services and intermediate goods and services is important because only final goods and services are directly included in gdp; intermediate goods must be excluded to avoid double counting them.