ECON 1010 Chapter Notes - Chapter 5: Gdp Deflator

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rubybadger418

4 Feb 2014

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Chapter 5 measuring a nations income my notes. Microeconomics: study of how individual households and firms make decisions and how they interact with another in markets. Macroeconomics: study of the economy as a whole. Gdp: measures total income of a nation, total income of everyone in the economy, total expenditure on the economy"s output of goods and services. *for an economy as a whole, income must equal expenditure. Gdp -> market value of all final goods and services produced within a country in a given period of time. Y = c (consumption) + i (investment) + g (government purchases) + nx (net exports) Consumption: spending by households on goods and services. Investment: purchase of goods that will be used in the future to produce more goods and services. Include spending on goods and services by local, territorial, provincial and federal governments.

Related Questions

Which of the following statements about GDP is correct

A) Money continuously flows from households to firms and then back to households, and GDP measures this flow of money

B) GDP measures two things at once: the total income of everyone in the economy and the total expenditure on the economy’s output of goods and services.

C) While not perfect, GDP is generally regarded as the best single measure of a society’s economic well-being.

D) All of the above are correct.

emeraldmarten620

5. Microeconomics is best described as the study of:

A) the choices made by individual households, firms, and governments.

B) inflation, unemployment, gross national product, and the nation's economy as a whole.

C) how markets interact in the aggregate economy.

D) marginal changes in the economy.

yelloweagle292

What is the market for factors of production?

What is the market for factors of production?
1. The market for factors of production is where households and firms interact to trade factors of production for factor payments. For example this is where people provide firms with labor and firms pay them with wages.
What is the money market?
1. The money market is where households, firms, and the government may save and/or invest their money to earn interests. Money market includes banks, stock market, bonds market, and other financial institutions where economic actors can buy and sell financial assets to earn interests and/or dividends.
Who are the three economic actors in the circular flow model?
1. In a circular flow model, the three main economic actors are the households, firms, and the government. Households include the typical individual consumers. Firms include businesses and similar producers in the economy. Finally, the government refers to the whole government system from federal to local level.
How is the national income of an economy determined?
1. The national income of an economy is determined by measuring the total value of the output produced in an economy or the total income earned by the actors in the economy. In a circular flow model, we can see that the value of total output produced should equal the total value of income generated and earned in the economy. This is because every dollar spent by someone in the economy is received by another person in the economy as income.
What is GDP?
1. The gross domestic product or GDP represents the sum total of the value of the final goods and services produced within the economy for a given year. It is the most commonly used measure of its economy’s productivity and income.

ECON 1010 Chapter Notes - Chapter 5: Gdp Deflator

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