EC140 Lecture 2: Chapter 20
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EC140 Full Course Notes
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It measures the value of production that occurs within a country"s borders, whether done by its own citizens or by foreigners located there: expenditure approach, consumption (c) Expenditure on household goods and services: durables (ovens, phones, etc. , non-durables (food, milk, etc. , services (concerts, haircuts, etc. , investment (i) Expenditure on goods that will be used to produce more: capital equipment (machines, tools, etc. , structures (factories, houses, etc. ) Expenditure on goods and services by government: net exports = exports imports (x m) Exports represent foreign spending on the economy"s goods and services. Imports are the portions of c, i , and g that are spent on goods and services produced abroad. Income approach: measures gdp by summing the incomes that firms pay households for the factors of production they hire, payment for labour services is the wages shown by the blue flow.
