EC250 Chapter Notes - Chapter 2: Black Market, Bamn, Net Domestic Product
Document Summary
Gross domestic product measures economic activity. Gross: means not excluding value of capital used up during the year. Only use precisely evaluated instead of value judgments. Measures restricted to stuff that has a market price: only things included that have value (dollar value) Main categories not included: house hold work: stuff free of charge by one member in the house, unrecorded activities: economic activities that economy doesn"t get. When you be selling that ganja: effect on environment: consequences of economic activity pollution. Flows: are variables measured per unit of time: income, i am making 200,000 a day. Stocks: are variables measured at a moment of time: money, measured at a moment of time, i have 200,000 dollars in my account. Monetary value of output: in order to add different goods and services. Value added: calculated to avoid double counting: double counting counting value of product twice. Problem with double counting arises when one firm buys supplies from another.
