Log in
HomeClass Notes1,200,000CA670,000

ECON 1BB3 Lecture Notes - Lecture 5: Intermediate Good, Transfer Payment, Gdp Deflator

106 views3 pages
greendinosaur870
20 Sep 2016
School
McMaster University
Department
Economics
Course
ECON 1BB3
Professor
Bridget O' Shaughnessy

For unlimited access to Class Notes, a Class+ subscription is required.

adrianagreen0110 and 39672 others unlocked
ECON 1BB3 Full Course Notes
11
ECON 1BB3 Full Course Notes
Verified Note
11 documents

Document Summary

Measures the total income of everyone in the economy and the total expenditure on the economy"s output of good and services these two are the same thing. Income = expenditure: this is because every transaction has two parties a buyer and a seller (every dollar of spending by a buyer is a dollar income of a seller) Gdp = total expenditures by households, or total income (wages. Housing services value = rent paid, or landlord income even when residence is owned, they estimate rent value. Excludes: most items produced/sold illicitly eg. drugs, produced/consumed at home (never enters marketplace) Ford produces + sells a car value included in gdp resell of same car is not: gdp measures value of production within a geographic confine of a country. British citizen works in canada included in gdp, canadian citizen owns factory outside canada not part of gdp.

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers

Related Documents

ECON 1BB3 Lecture Notes - Lecture 3: Greeting Card, Intermediate Good, Seasonal Adjustment
carmineant711
ECON 1BB3 Chapter Notes - Chapter 5: Gdp Deflator, Gross Domestic Product, Final Good
orchidmouse779
ECON 1BB3 Chapter Notes - Chapter 5: Gdp Deflator
emeraldraccoon887

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.

The basic circular flow model shows that:

a. total income received by the households is less than the total value of goods and services produced because of leakages.

b. total income received by the households is different from the dollar value of goods and services produced because the units of measurement are not the same.

c. total income received by the households is less than total payments to business because there are business profits.

d. total income received by the households must be equal to the dollar value of all goods and services produced.

What is the market for factors of production?

  1. 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. 

  2. 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.

  3. 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.

  4. 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.

  5. 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.