Gross Domestic Product and Economic Growth Power Point Notes

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Calculated Two Ways • Expenditure Approach -what we spend • Consumer, business, and government goods and services as well as net exports • Durable goods - goods that last awhile • Non durable goods - short period of time • Income Approach -what we make • firm sells a product or service, the selling price minus the dollar value of goods/services • In theory, they should give us same total
Expenditure Approach • Suppose an economy’s entire output is cars and trucks. This year the economy produces: • 10 cars at $15,000 each = $150,000 • 10 trucks at $20,000 each = $200,000 • total = $350,000 • The economy’s GDP for this year is $350,000! Income Approach • Suppose an economy’s entire output is cars and trucks. • All employed citizens, therefore, would work in the car and truck industry, or for its suppliers. • The combined selling price of all the cars and trucks reflects the money paid to all the people who helped build the vehicles. • The economy’s GDP for this year, then, is the sum of the income of all its working citizens, or $350,000 (This includes the combined income of all engineers, designers, planners, assembly-line workers, managers, suppliers, etc.)~ • The economy’s GDP for this year is $350,000!
Page 1 and 2: Chapter 12 Gross Domestic Product a
Page 3: 1. Gross Domestic Product • Dolla
Page 7: Limitations of GDP • Non-market a
Page 13 and 14: Measurements of the Macro economy
Page 15 and 16: 2. Business Cycles • A periods of
Page 17 and 18: What Keeps a Business Going • Bus
Page 19 and 20: Business Cycles throughout history
Page 21 and 22: Measuring Economic Growth • Real
Page 23 and 24: Technological Progress • An incre

Gross Domestic Product and Economic Growth Power Point Notes

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