16466 Chapter Notes - Chapter 21: Aggregate Demand, Business Cycle, Longrun
Document Summary
Gross domestic product: the total market value of all final goods and services produced annually within a country"s borders is gross domestic product (gdp). It can be found by adding expenditure, income or production. It is known as the triple identity: a higher gdp per person indicates a higher standard of living, known as gdp per capita. Real gdp = (base year prices x current year quantities) Increasing real gdp is usually seen as the most important goal for economic policy: however, increasing real gdp per capita is what improves the standard of living and quality of life. Economic growth: economic growth is measured by the annual percentage change in real gdp. =( real gdp later year real gdp earlier year. )x (cid:883)(cid:882)(cid:882: the rate of growth changes from year to year, with strong growth in some years and weak growth in others.
