Economics 1022A/B Lecture Notes - Lecture 2: Political Freedom, Gross Profit, Potential Output
![ECON 1022A/B Full Course Notes](https://new-docs-thumbs.oneclass.com/doc_thumbnails/list_view/2773945-class-notes-ca-western-econ-1022ab-lecture11.jpg)
27
ECON 1022A/B Full Course Notes
Verified Note
27 documents
Document Summary
Monday, january 5, 2015 to create a total value of output! produced in a country in a given time period! The circular ow diagram shows the transactions among households, rms, governments, and the rest of the world! The sum of the red ows equals the blue. That is: y = c + i + g + x m! I = investment (purchase of ! capital goods)! G = government spending on ! goods and services! > total expenditure on nal goods and services equals gdp! > aggregate income equals the total amount paid for the use of factors of ! production: wages, interest, rent, and pro t! = gdp = c + i + g + x m! = y = c + i + g + (x m)! > firms pay out their receipts from the sale of nal goods; income = expenditure !