Monitoring the value of Production: GDP Flashcards
Market Value (GDP)
GDP is a Market Value- Goods/Services are valued at their Market Prices
Intermediate Good
Is a item produced by 1 company, bought by another and used as a component of a final good
Produced Within a Country
GDP measures production within a country- Domestic Production
What is Included in GDP?
Domestically Produced Final goods/services (capital goods), new construction of structures and changes to inventory
What is NOT Included in GDP?
Intermediate Goods/Services, Inputs, Used goods, Financial Assets, Goods/Services Produced a country
Consumption expenditure
is the total payment for
consumer goods and services.
Investments
Purchase of NEW Plant, Equipment and Buildings and other additions to inventory
government expenditure
Buy goods/services from firms
Net Exports
Exports - Imports (x - m)
When Net Exports are Positive
the net flow of goods and services is from Canadian firms to the rest of the world.
When Net Exports are Negative
the net flow of goods and services is from the rest of the world to Canadian firms.
Calculation of GDP
Consumer Expenditure + Investment + Government Expenditure + Net Exports (x - m)
Aggregate Income
Equals the total amount paid for the use of factors of production (wages, interest, rent and profit)
Gross Means
BEFORE deducting the depreciation of capital
Net Means
AFTER deducting the depreciation of capital
