Output and Income

Question 1

GDP

Answer 1

Market value of all final goods and services produced in the economy for given period

Question 2

final goods

Answer 2

goods consumed by final user

Question 3

intermediate goods

Answer 3

goods used in production of other goods

Question 4

product approach

Answer 4

value of firms output minus value of intermediate goods bought from other firms

Question 5

expenditure approach

Answer 5

GDP = C + I + G +(X-M)

Question 6

Income approach

Answer 6

GDP = after tax wages + after tax profits + interest income of households + taxes paid by firms and households + inventory investment by firms.

Question 7

Real GDP

Answer 7

measures market value of the output of final goods and services produced using price of base period

Question 8

Real GDP per capita

Answer 8

real aggregate GDP/total population

Question 9

problems using GDP as measure of output and happiness

Answer 9

doesn’t measure all output
doesn’t measure environment
doesn’t measure happiness of people