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ECON 1 Lecture Notes - Lecture 8: Gross Domestic Product, Gdp Deflator, Dry Cleaning

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tanguinea-pig96
24 Feb 2018
School
UC-Irvine
Department
Economics
Course
ECON 1
Professor
George Sarraf

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ECON 1 Full Course Notes
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Document Summary

Measures total income of everyone in the economy. Also measures total expenditure on the economy"s output of goods and services. Because every dollar a buyer spends is a dollar of income for the seller. Illustrates gdp as spending, revenue, factor payments, and income. Factors of production are inputs like labor, land, capital, and natural resources. Factor payments are payments to the factors of production (e. g. , wages, rent) Own the factors of production, sell/rent them to firms for income. Buy/hire factors of production, use them to produce goods and services. Matches savers" supply of funds with borrower"s demand for loans. Trades goods and services, financial assets, and currencies with the country"s residents. The market value of all final goods & services produced within a country in a given period of time. Goods are valued at their market prices, so: All goods measured in the same units (e. g. , dollars in the u. s. )

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Related Questions

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.