ECN 204 Lecture Notes - Lecture 4: Xm Satellite Radio
1 Jul 2020
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National income accounting - measures economy"s overall performance. This accounting allows economists to assess health of economy by comparing levels of prod. Formulate policies that will maintain and improve economy"s health. Gdp or aggregate output is a monetary measure used to measure economic performance by measuring value of output in monetary terms. Does not include nonproduction transactions excluded from gdp. Intermediate goods - products that are purchased for resale or further manufacturing/processing (ex. crude oil) Final goods - products purchased by end users (ex. gasoline) Value of final goods includes costs of intermediate goods to produce them. Multiple counting would happen if intermediate goods were included in gdp figures. Value added - market value of a firm"s output less the value of the inputs the firm bought from others. Can avoid multiple counting by measuring and gathering value added at each stage.
