Econ 2105 Week 2 Pt. 1 Notes
Econ 2105 Week 2 Pt. 1 Notes ECON 2105 080
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This 3 page Class Notes was uploaded by Hagar Notetaker on Tuesday August 30, 2016. The Class Notes belongs to ECON 2105 080 at Georgia State University taught by in Summer 2016. Since its upload, it has received 11 views. For similar materials see PRINCIPLES OF MACROECONOMICS in Economics at Georgia State University.
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Date Created: 08/30/16
Econ 2105 Week 2 Chp. 6: Intro to Macroeconomics and GDP (Pt. 1) What is GDP Market value of all final goods and services produced within a nation during a specific period of time o Functions as barometer for economy o Measures nation’s output and income o Computed quarterly by Bureau of Economic Analysis (BEA) Output and Income Essentially same Nations that produce large amount of high-valued output relatively wealthy Nations that don’t produce large amount of high-value products tend to be poor Firms Goods & Labor Services Families Output = GDP = Income Market Value Reflected in prices times quantity o When added up = GDP Goods Produced Quantity Price Market Value Corn 12 billion $5 $60 Billion Cars 8 million $30,000 $240 Billion Econ 2105 Week 2 GDP increases for 2 reasons 1.) More goods & services produced 2.) Higher prices Real GDP Used 2009 base prices Accounts for changes in prices o Better measure of economic activity o EX: real GDP 2015: $16,397 billion Only because of Nominal GDP prices increasing GDP computed in current year prices o EX: Nominal GDP 2015: $18,036 Only final goods and services included in GDP o Goods that’re sold to final users EX: Cellphones, Laptops, etc. Includes prices of everything put into product during production Intermediate Goods o Goods that firms repackage or bundle with other goods for sale at later stage EX: cellphone case, keyboard, laptop processer Goods and Services Goods o Tangible Cars, food, houses, etc Services o Provide benefits without production of tangible products Must be produced domestically (imports not included) Can be produced by resident or foreigner o EX: KIA plant in GA is US GDP Nike plant in Thailand goes to Thai GDP Time Used products included in year they were produced o EX: Used car included in GDP it was manufactured Econ 2105 Week 2 Uses of GDP Estimates living standards across time & nations o Per Capita GDP is average living standard of country GDP/Population = Per Capita GDP o Total GDP doesn’t adjust to population Measures economic growth o Changes in living standards over time o Where economy grows, so does living standard Measures business cycle o Short-run fluctuations in economic activity that can cause output to be above or below long-run o Stages: 1.) Expansion slow economic growth jobs easier to find 2.) Contraction slow decay jobs harder to find 3.) Peak 4.) Trough