WEEK 1 SUMMARY

Question 1

What is the definition of GDP?

Answer 1

“the market value of all final goods and services produced within a country in a year”

Question 2

What is the insight of GDP?

Answer 2

GDP is total spending, total output and total income

Question 3

What is the practical implication of GDP?

Answer 3

we can measure GDP by adding total spending, total output, or total income

Question 4

When GDP is TOTAL SPENDING:

i) what can it be measured as?

ii) what is that measurement called?

Answer 4

i) Y = C + I + G + NX

ii) “Gross Domestic Product”

Question 5

What does Y stand for in?

Y = C + I + G + NX

Answer 5

Y= GDP

Question 6

What does C stand for in?

Y = C + I + G + NX

Answer 6

C = Consumption

Question 7

What does I stand for in?

Y = C + I + G + NX

Answer 7

I = Investment

Question 8

What does G stand for in?

Y = C + I + G + NX

Answer 8

G = Government purchases

Question 9

What does NX stand for in?

Y = C + I + G + NX

Answer 9

NX = Net exports

Question 10

When GDP is TOTAL OUTPUT:

i) what can it be measured as?

ii) what is that measurement called?

Answer 10

i) Sum of value added

ii) “Value Added”

Question 11

When GDP is TOTAL INCOME:

i) what can it be measured as?

ii) what is that measurement called?

Answer 11

i) Total wages + Total Profits

ii) “Gross Domestic Income”