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Economic Indicators and GDP

Explore the concepts of GDP calculation, national income accounting, and economic indicators. Learn about nominal vs. real GDP, limitations, and other output measures. Discover the influences on GDP through aggregate demand and supply.

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Economic Indicators and GDP

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  1. Economic Indicators and GDP Chapter 12 Section 1

  2. Gross Domestic Product (GDP) • National Income Accounting • Look at ____________, income, investment, and savings • Department of _____________

  3. GDP • Defining GDP • The ________ value of all final goods and services produced within a country’s borders in a given year • Dollar value – total cash value • Final _______ and Services – no intermediate goods • Produced within a country’s ____________ • In a given year – excludes resells (ex: cars)

  4. GDP • ________________ Approach • Consumer g&s • Durable and nondurable goods • business g&s • ______________ g&s • net exports • Exports - imports

  5. GDP • _________ Approach • Add up all the incomes in the economy minus the dollar value for the goods and services purchased from other firms (material costs) • In theory, Income and Expenditure Approach should give you the same total

  6. Nominal vs. Real GDP • ____________ GDP • GDP calculated in current prices • _________________ • GDP expressed in constant, or unchanging, prices • Use a ___________ year of prices to compare things, giving a more accurate depiction of the economy • Changes in ______________ should not affect GDP

  7. Limitations of GDP • Nonmarket Activities • The _______________ Economy • Negative ______________ • Quality of Life • More stuff = better life????

  8. Other Output and Income Measures • Gross National Product (GNP) • Annual income earned by a nation’s firms and citizens • Does not account for depreciation of capital equipment • Net National Product (NNP) • GNP – cost of depreciation • National Income (NI) • Personal Income (PI) • NI – reinvested profits, income taxes, SS taxes • Disposable Personal Income (DPI) • Money you have to spend after taxes

  9. Influences on GDP • Aggregate __________ • Supply curve for the entire economy • Compare ________ GDP (x-axis) and price level (y-axis) • Price level – the average of all prices in the economy • ______________ Demand • The amount of goods and services in the economy that will be purchased at all possible price levels

  10. Aggregate Supply and Demand

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