2/5 LECTURE Flashcards
output is highly dimensional so we must reduce it down to
a single number (GDP)
output is
the set of all final goods and services produced by a country over the course of a particular period
measure is
a standard unit used to express the size, amount or degree of something
GDP is the measure of and is
value of output and is the value of final goods and services produced within a countries borders over the course of a year
final goods/services are
goods and services produced for direct use by the buyer
example of final goods/service
pants
intermediate outputs are
goods and services used up in the process of producing other (final or intermediate) goods or services
example of intermediate inouts
zipper
What is gross national product (GNP)
value of final goods and services produced using capital and labor of a countrys residents
when is a variable said to be nominal
if it is measured in terms of money
when is a variable said to be real
measured in terms of physical units
when is a variable said to be aggregate
measures total/overall amount
variable is said to be per capita
if it is measured per person
what are the four types of GDP
-aggregate nominal
-aggregate real
-per capita nominal
-per capita real
what are the three ways nominal GDP can be measured
-expenditure approach
-income approach
-production/value-added approach
what is expenditure approach
sum of all purchases made by consumers, firms governments and foreigners
income approach is
sum of income earned by labor and capital
production/value added approach is
sum of the value added at each stage of production
what is NGDP per capita
comparison across countries of the total value of all goods and services produced in a given time period less the value of those made during the production process per person
real GDP is
allows for comparison of output over time, accounts for inflation
GDP deflator
to account for inflation, we need to measure decline in purchasing power
Real GDP per person
real GDP impacted by population chnages
is nominal per capita GDP measured domestic or cross country
cross country
is real aggregate GDP and real per capita GDP measured within country
yes, within country over course of time
growth
change in a varibales value between two points in time (new-old/old)
nominal growth is
the increase in the dollar value of production over time
real growth is
measures economic growth, as expressed by gross domestic product (GDP), from one period to another, adjusted for inflation or deflation
what do none of the four measures of GDP account for
-distribution of output
-higher production does not equal higher levels of welfare/happiness
