Chapter 4

Question 1

what does gross mean?

Answer 1

total before subtracting depreciation of capital

Question 2

Definition of GDP

Answer 2

The total market value of all final goods and services produced within a country in a given period (gross domestic product)

Question 3

Components of GDP Formula (Expenditure Approach)

Answer 3

GDP=C+I+G+(X−M)
C: Household Consumption
I: Investment
G: Government Spending
X: Exports
M: Imports

Question 4

What is Expenditure Approach?

Answer 4

total money spent by individuals, firms, government.

ex: consumers expenditure = consumer total buying

Question 5

GDP = ___________ = ___________ =___________ = Y

Answer 5

Total Production. Total Expenditure. Total Income.

Question 6

Why does GDP = Total Expenditure = Total Production = Total Income

Answer 6

By definition, GDP = Gross Domestic Product. The formula calculates the total expenditure, and it measure total production in canada.
Income approach is also another way to measure GDP

Question 7

Difference between Nominal and Real GDP

Answer 7

Nominal GDP: Measures value of goods/services at current year prices.
Real GDP: Measures value of goods/services at constant base-year prices, adjusting for inflation.