Economics 10a Chapter Notes - Chapter 23: Gdp Deflator, Intermediate Good

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emeraldraccoon202

26 Jun 2018

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Chapter 23

Measuring a Nation’s Income

● Gross Domestic Product (GDP)- the market value of all final goods and services

produced within a country in a given period of time

○ the best single measure of a society's economic well-being

● Inflation/deflation: the rate at which average prices are rising or falling

● Unemployment: the percentage of the labor force that is out of work

● Retail Sales: total sales at stores

● Trade deficit: the imbalance of trade between the US and the rest of the world

● Macroeconomics tells about the entire economy

○ the study of economy-wide phenomena, including inflation, unemployment, and

economic growth.

● Microeconomics: the study of how households and firms make decisions and how they

interact in the market

● GDP measure two things at once:

○ the total income of everyone in the economy

○ the total expenditure on the economy’s output of goods and services

○ For an economy as a whole, income must equal expenditure

■ Why?

● a transaction must have a buyer and seller

● circular flow diagram (pg. 493)

● The Measurement of Gross Domestic Product

○ GDP uses market price

○ GDP excludes most items produced and sold illicitly (illegal drugs)

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Document Summary

Gross domestic product (gdp) - the market value of all final goods and services produced within a country in a given period of time. The best single measure of a society"s economic well-being. Inflation/deflation: the rate at which average prices are rising or falling. Unemployment: the percentage of the labor force that is out of work. Trade deficit: the imbalance of trade between the us and the rest of the world. The study of economy-wide phenomena, including inflation, unemployment, and economic growth. Microeconomics: the study of how households and firms make decisions and how they interact in the market. The total income of everyone in the economy. The total expenditure on the economy"s output of goods and services. For an economy as a whole, income must equal expenditure. A transaction must have a buyer and seller. Gdp excludes most items produced and sold illicitly (illegal drugs) Gdp includes both tangible and intangible goods.

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

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.

If an economy's GDP falls, then it must be the case that the economy's

A. Income and saving fall

B. Income and market value of all products both fall.

C. Income falls and the market value of all production rises.

d.Income rises and the market value of all production falls.

2. Gross Domestic product measures

a. Income and expenditure.

B. Income

c. Expenditure.

d. Neither.

3. If all quantities produced in the united states rise by 13.4% and all prices fall by 13.4% which of the following occurs?

Does Real GDP rise or fall? Does the nominal GDP rise or fall?

4. Which of the following does not add to US GDP?

a. The federal gov. Sends a social security check to your grandmother.

b. CIty of new york pays a salary to policemen.

c. Air France buys a plane from Boeing, the US aircraft manufacturer.

5. IS the best single measure of a society's economic well-being the unemployment rate or the GDP?

6. Keynesian economics was developed by John Keynes in response to:

A. The great recession.

b. The great depression.

C. Out of control gov. spending.

17. For an economy as a whole,

a. Wages must equal profit.

b. consumption must equal income.

c. Income must equal expenditure.

d. Consumption must equal saving.

8. As in the case f Ireland, Keynesian economics does not tend to work in countries that:

a. Are large and self-sustaining.

b. Are small and insulated.

c. Are medium-sized with good governments.

d. Are smaller and are open to free (ish) trade.

e. Are large and have free trade.

Thanks! Please be as detailed as you can.!

coralmoose18

Economics 10a Chapter Notes - Chapter 23: Gdp Deflator, Intermediate Good

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