ECO100Y5 Chapter Notes - Chapter 21: Autonomous Consumption, Consumption Function, Cyan

• School: UTM
• Department: Economics
• Course: ECO100Y5
• Professor: Zachary Mahone

Document Summary

Co(cid:373)po(cid:374)e(cid:374)ts of gdp, fo(cid:396)e(cid:272)ast gdp, e(cid:395)uili(cid:271)(cid:396)iu(cid:373) of spe(cid:374)di(cid:374)g/output, spe(cid:374)di(cid:374)g multiplie(cid:396) Gross domestic product is the value of all the final goods and services produced in a country within a specific time period. The total amount produced (total output or real gdp) equals the total amount of spending individuals & institutions want to do in a year plus the accumulation of inventories. Total output is equal to total income; wages, profits, rents, interest & taxes. Businesses don"t use all of their income to pay wages; they investment. Also, some of the production is sent abroad & people buy some products from abroad. Governments tax income to provide defense & other services, or provide income through welfare. There are no guarantees that spending equals output. Gdp = consumption + investment + government spending ( welfare) + exports ( imports) Consumption is the total spending by individuals on products in a year.