ECON 2105H Study Guide - Midterm Guide: Purchasing Power Parity, Business Cycle, Kfc
17 Mar 2017
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Gdp-the market value of the final goods and services produced within a country in a given period of time. Intermediate goods: ex: chicken not counted when bought by kfc or the supermarket. Illegal activity: gambling, drug sales, prostitution, nonmarket transactions, work you do in your own household, us firms producing overseas, ex: mcdonald"s in china, value of leisure time, environmental quality, access to healthcare and life expectancy. Firms pay income to households for their factors of production (y) Rest of the world buys net exports (x-m) Y = c + i + g + x -m = gdp. Measures gdp by summing the incomes that firms pay households for the factors of production they hire. Measures gdp as the sum of consumption, expenditure, investment, government expenditure, and net exports. Real: calculated at the prices of a base reference year, and therefore are adjusted for inflation.
