Flashcards
Macro Ch.1-2
Cards in this deck (15)
- 1GDP definitionGDP is the value of all final goods and services currently produced for sale during a particular period of time
- 2Cause of Stagflation?Shifts in Supply Curve (OPEC/DotCom Boom)
- 35 Exclusions from GDP1)Intermediate goods are excluded from GDP
2) second hand goods are excluded from GDP
3)all transfer payments are excluded from GDP (welfare,SS,stocks etc)
4)Non-marketed services are excluded from GDP
5) Illegal activities are excluded from GDP - 4Expenditure Approach GDPGDP=C+I+G (+Xn)
- 5CConsumer expenditures:
Nondurable goods
durable goods
services - 6IGross Private Domestic Investment:
Fixed, residential construction, inventory - 7GGov't PURCHASE of goods and services
G= Gc-Tr where Tr=transfer payments - 8Income Approach GDPSum of the income in economy. Calculated via the factors of production
GDP=R+W+i+PY+CP+Tp+dep - 9Factors of Production1)Land--rent
2)Labor--wages
3)Capital--interest
4)Entrepreneurship - 10Variable Meanings for Expediture ApproachGDP=W+R+i+PY+CP+Tp+dep
W=Wage, R=rent, i=interest, PY=proprietors income,Tp=tax on production,depreciation
CP=CPtax+Retained Earnigns (RE)+dividends - 11GNP DefinitionGross National Product: Income of all the nationals of the country including those abroad
- 12NNPNet National Product: GNP-Deprecition
- 13National IncomeNNP-Tp
- 14Personal IncomePI=National Income-CPT-RE
- 15Disposable IncomePI-Personal taxes (tp)