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Gross Domestic Product (GDP)
the market value of all final goods and services produced within a country in a given period of time
- price equals its value measured in same units: dollars
- no value is excluded
- EX: cleaning your own house
intended for end user
- used as components or ingredients in production of other goods
- DON'T COUNT
"Goods and Services"
- tangible goods and intangible services
- DVD's and cell phone service
only current goods
"Within a Country"
measures production within a country's borders whether done by foriegners or not
"Given Period of Time"
usually 1 year or quarter (3 months)
- total spending by households on goods and services, with the exception of purchases of new housing
- include rent payments
- Imputed rental value: how much house would rent for in area, not purchase price
total spending on capital equipment, inventories, and structures, including household purchases of new housing
Government Purchases (G)
- spending on goods and services by local, state, and federal governments
- EX: social security
Net Exports (NX)
spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports)
Total Spending in GDP
C + I + G + NX
production of goods and services valued at current prices
production of goods and services valued at constant prices
measure of the price of level calculated as the ratio of nominal GDP to real GDP times 100