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Gross Domestic Producthttp://www.npr.org/blogs/money/2011/10/26/141741360/video-what-is-g
dp
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What is GDP?
The market value of all final goods & services produced within a nation’s borders in a given time period (often used annually)
Measures 2 things at once:1. Total income of everyone in the
economy2. Total expenditure on the economy’s
output of goods
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3. What is & isn’t counted?
a. Products used in making other products
b. Buying used goodsc. They are charted in a yearly span d. Not produced in U.S.e. No way to measure outf. B/c they are illegal or avoid taxation
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Calculating GDP
1. Consumption2. Investment3. Government spending4. Net exports
Formula: C+I+G+X=GDP
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Real vs. Nominal GDP
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Real GDP
Uses constant prices Real GDP changes when there is a
change in output
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Nominal GDP
Uses current prices Nominal GDP changes when there is
a change in output or price
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