Economics 1022A/B Study Guide - Midterm Guide: Gross Domestic Product, Purchasing Power Parity, Nominal Interest Rate

• School: Western University
• Department: Economics
• Course: Economics 1022A/B
• Professor: Sunghoon Cho

Document Summary

Chapter (cid:1006)(cid:1004) : measuri(cid:374)g gdp a(cid:374)d e(cid:272)o(cid:374)o(cid:373)i(cid:272) gro(cid:449)th. Difficult to have a single measure: gdp (national income) per capita is used better proxy than anything else, ex. Investment = firms buying capital (physical capital), not money, so that they can have. Coffee cost sh. 25 to make but has a market value of . 70: final goods and services, does not include value of intermediate goods, or the transaction costs during the production of the final good, ex. Coffee producers pay sh. 10 for coffee beans but this is not included in gdp because the sh. 10 cost incurred is included in the price of the finished cup of coffee, . 70: produced within a country, gross domestic product. If sold i(cid:374) o(cid:374)e (cid:272)ou(cid:374)tr(cid:455) a(cid:374)d produ(cid:272)ed i(cid:374) a(cid:374)other, it does(cid:374)"t (cid:272)ou(cid:374)t: e(cid:454). Ti(cid:373) horto(cid:374)"s (cid:373)ugs are produ(cid:272)ed i(cid:374) chi(cid:374)a, so those (cid:373)ugs are i(cid:374)(cid:272)luded i(cid:374) chi(cid:374)a"s gdp (cid:374)ot ca(cid:374)ada"s.