ECON 2010 Chapter : Ch 6 And 10
Document Summary
The scarcity principle: no matter how much you have, it"s still not enough. 1st method: market value approach: the market value of nal goods and services produced in a country in a given period of time. Final goods and services: don"t want to double dip while calculating gdp; want to distinguish intermediate goods and services and capital goods; money is not a capital good. Market value: value added is the market value of the product minus the cost of inputs. 2nd method of nding gdp: expenditure: all goods produced are purchased by either households, rms, the government, or foreigners; amount spent=market value. C: consumption expenditure: consumer durables (long-lived items such as cars), consumer non-durables (short-lived items such as clothing), and services (education, taxi rides, haircuts) I: investment: business xed (property, equipment), residential investment (new homes), and inventory investment (change in unsold goods to the company"s inventory)
