23115 Study Guide - Final Guide: Gdp Deflator, Net Income, Government Spending
Document Summary
Measuring a nation"s income & cost of living: how gdp is defined and calculated. Macroeconomics: explains economic changes affect economy as whole. Gdp measures nation"s total income (best measure of society wellbeing) Better measure of each individual would be gdp per person. Total income of everyone in economy and total expenditure on output. *sellers income = buyers expenditure (total income = total expenditure) *gdp =market value of all final goods/services produced within a country. Buying 2nd hand is not part of gdp (to avoid double counting: the breakdown of gdp into four major components, the distinction between nominal gdp and real gdp. *gpd (y) = c + i + g + nx (expenditure approach) *value added = difference between final production values & inputs value. Consumption spending by households (laptops, not including houses) Investment new capital equipment, inventory, new housing. Government purchases doesn"t include transfers like pension benefits. Net exports exports minus imports (aka trade balance)
