EC140 Chapter Notes - Chapter 20: Retained Earnings, Final Good, Intermediate Good
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Gdp: market value of final goods and services produced within a country in a given time period: market value. The prices at which items are traded in markets consistent with economist"s concept of value. Something is worth what someone will pay to obtain it. If price of an apple is 10 cents, the market value of 50 apples is : final goods and services. Final good: item that is bought by its final user during a specified time period. Intermediate good: item that is produced by one firm, bought by another, and is used as a component of a final good or service. Double counting: occurs if we were to add the value of intermediate goods to the value of final goods. But some goods can be final or intermediate in different situations. Ex: ice cream on a hot summer day vs. ice cream restaurant buys for sundaes is intermediate.
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