1. GDP Chapter 7

2. Gross Domestic Product GDP is the total market value of a country’s output. It is the market value of all final goods and services produced within a given period of time by factors of production located within a country.

3. Terms 1: Final Final Intermediate Value added

4. What is not counted Goods produced within the household Used goods sold in the market even if to final buyers.

5. What is ??? counted Fixing damage: Earthquake or storm Medical bills for lung damage due to bad air

6. GDP vs GNP GDP factors of production located within a country GNP factors of production owned by a country’s citizens, regardless of where the output is produced.

7. Calculating GDP Expenditure Approach –Consumption, C –Investment, I –Government, G –Net Exports, EX - IM GDP = C + I + G + (EX - IM)

8. Calculating GDP II Income Approach GDP = NI + some adjustments National Income is total income earned by factors of production owned by a country’s citizens

9. GDP and Social Welfare Leisure Reducing pollution Storm and other disaster damage. Underground economy Per capita ?? Measure exchange rates

10. Nominal versus Real GDP Nominal: Measured in current dollars Real: adjusted for inflation.