ECO 105 Goel Week 9 Notes: 10/12-10/16
ECO 105 Goel Week 9 Notes: 10/12-10/16 ECO 105
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This 2 page Class Notes was uploaded by Daniel Hemenway on Saturday October 17, 2015. The Class Notes belongs to ECO 105 at Illinois State University taught by Rajeev Goel in Fall 2015. Since its upload, it has received 32 views. For similar materials see Principles Economics in Economcs at Illinois State University.
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Date Created: 10/17/15
ECO 105 Goel 10121016 Measuring Output and Growth Intermediate Goods Used to produce other goods Has little use by itself Final Goods Purchased or final use by consumers or businesses E Market value of all final Goods and services produced by the factors of production Located in the country during a year Measuring GDP 1GDPCIGX M C Personal consumption expenditures 0 I Investment spending G Government purchases including federal state and local govt s 0 Net Exports X Exports M Imports Foreign Savings M X ods and Servicm Households Business Firms Inter ediate Prod Md Labor CapitM Depreciation Value of the existing capital stock that has been consumed or used in the production process Inventory Investment Change in the value of inventory stocks Fixed Investment Investments in plant structures and equipment 2 GDP Compensation of Employees Proprietor s Income Rental Income Corporate Profits Interest Depreciation Indirect Bus Tax GDI Gross Domestic Income Approximate sum of all income earned by factors of production 3 GDP Total Sales Purchases ie the sum of the value added of all industries Net Output or Value Added Value of industry output minus the value of purchases from other industries House ld Prod ECO 105 Goel 10121016 Real and Normal GDP Real GDP Removes the effect of rising prices on nominal GDP Real GDP per Capita Real GDP Population The best measure of living standards Omissions from GDP Nonmarketed goods and services ie Household production Illegal Activities ie Illegal gambling Value of Leisure Transfer Payments Payments to recipients who have not earned them through the sale of their production factors and who have not supplied current goods and services in exchange for these payments ie subsidies grants GNP Gross National Product w The final output produced by US residents whether in the U5 or abroad In contrast GDP includes goods and services produced by labor and capital in the US whether or not suppliers are residents of the US NNP Net National Product GNP Depreciation National Income NNP Indirect Bus Taxes Payments made to all factors PPP Purchasing Power Parity A rate for converting one economy s output into the prices of another country It is the exchange rate between two currencies that equates the real buying power of both currencies