Download - 202 lecture 2
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ECO 202 Macroeconomics
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GDP Gross Domestic Product
The market value of all final goods and services produced in a country in
a given time
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GDP Per Capita =
GDP Population
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GDP DeflatorWhat something
would sell for
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Market ValueOne Apple
plus One Orange
= Three Riyals
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AllEverything except...
Stuff you don’t sell
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FinalIntermediate
Final
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Final
Intermediate
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Goods and Services
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Goods
Services
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ProducedNew Stuff
Does not include the sale of used
goods
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Within a Country
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Only production
within Saudi Arabia
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In a given period of time
Year Y/Y Quarter Q/Q
Annualized: Q x 4
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Percentage Change
new number - old number old number
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This Year - Last Year Last Year
This Year = 75 Last Year = 60 Percentage Change?
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75 - 60 60
15 60
.25 or 25%
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How do you calculate
GDP?
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GDP =C = Consumption I = Investment G = Government X = Exports M = Imports
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GDP =C + I + G + (X - M)
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ConsumptionSpending by
households on goods and services, except new housing
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InvestmentSpending on capital
equipment, inventories, and structures, including new
housing
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GovernmentSpending on goods and services from
local, state, and federal governments.
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Net ExportsExports minus
imports
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Net ExportsForeigners buying
exports minus domestic residents
buying foreign goods
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What is GDP?C = 105 I = 40 G = 25 X = 30 M= 20
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What is GDP?C = 105 I = 40 G = 25 E = 30 I = 20
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GDP= C + I + G + (X - M) = 105 + 40 + 25 +(30-20) = 105 + 40 + 25 +10 = 180