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Chapter 13 Economic Performance Sec. 1: Measuring the Nation’s Output

Chapter 13 Economic Performance Sec. 1: Measuring the Nation’s Output. Warm-Up What is GDP? What does it measure? What is one thing you might be able to determine from a country’s GDP?. GDP: The Measure of National Output.

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Chapter 13 Economic Performance Sec. 1: Measuring the Nation’s Output

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  1. Chapter 13Economic PerformanceSec. 1: Measuring the Nation’s Output Warm-Up What is GDP? What does it measure? What is one thing you might be able to determine from a country’s GDP?

  2. GDP: The Measure of National Output • The market value of all final goods and services produced in a country in a calendar year. • National Income Accounting: a system of statistics and accounts that keeps track of production, consumption, saving & investment

  3. What’s Excluded for GDP • Intermediate Products: products used to make other products already counted in GDP • Ex. Replacement tires vs. tires on your new car • Secondhand Sales: the sale of used goods • Nonmarket Transactions: transactions that do not take place in the market • Ex. Homemakers services (cooking, cleaning, child care)

  4. GNP: The Measure of National Income (measuring income vs. output) • Gross National Product (GNP): the dollar value of all final goods, services & structures produced in 1 yr. With labor and property supplied by a country’s residents • Net National Product (NNP): GNP less depreciation • National Income: income that is left after all taxes except the corporate profits tax are subtracted from NNP • Personal Income: total income to consumers before income taxes • Disposable Personal Income: total income the consumer sector has at its disposal after personal income taxes

  5. Economic Sectors & Circular Flows • Consumer Sector (the largest) • Household: all persons who occupy the same living space • Investment Sector aka business sector: proprietorships, partnerships & corporations • Bring the factors of production together to produce output • Government Sector aka public sector: local, state & federal levels of government • Receive income in the form of taxes • Foreign Sector: all consumers & producers outside of the U.S.

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