Summary: Economics | 9780273735755 | Michael Parkin, et al

Read the summary and the most important questions on Economics | 9780273735755 | by Michael Parkin, Melanie Powell, Kent Matthews.

• 20 Measuring GDP and Economic Growth

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• What is the difference between Final goods and intermediate goods

  Final good is an item that is bought by its final user in a specified time period.

  Intermediate good is an item that is produced by one firm, bought by another and used as a part of a final good.

• When to count GDP?

  if the goods and services are produced in the county where you want to count GDP.

• GDP in a given time period

  quarter of a year = quarterly GDP data

  year = annual GDP data

• Equality between Value of total production and total income

  if standard of living rises when our incomes rise and we can afford to buy more goods or services..

  also need to produce more goods and services if we are able to buy more.

• 20.2.1 Households and Firms

• What is consumption expenditure

  Total payment of goods and services by households

  For example, beer, pizza, dry cleaning

• What is investment by a firm

  The purchase of a new plant, equipment, buildings and additional stock

• 20.2.4 GDP Equals Expenditure Equals Income

• In which 2 ways can GDP be measured?

  1. The expenditure approach 

  2. The income approach

• 20.3 Why is domestic product 'Gross'?

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• What does 'gross' in GDP means?

  Gross means before deducting the depreciation of capital

• What is gross investment?

  The total amount spent of purchases of new capital and replacing depreciated capital

• 20.5 The expenditure approach

• How does the expenditure approach measures GDP?

  It measures it as the sum of consumption expenditure (C), investment (I), government expenditure (G) and net export of goods and services (X-M) corresponding to the red flows of the circular flow model.