Class notes
ECON 352-Chapter 2 Notes
- Course
- ECON 352
- Institution
- University Of Southern California
ECON 352-Chapter 2 Notes
[Show more]
Seller
Follow
Content preview
Chapter 2 NotesThe Measurement and Structure of National Economy
1) GDP: the market value of all measurable final goods and services produced domestically
○ GDP today = $23T
○ GDP per capita: over $60,000
● Distinction between nominal GDP & real GDP:
○ Nominal GDP is always larger than real GDP because it doesn’t take into account
of inflation
○ Common price or base price: changes every 10 years
○ 2012: 100 CPI
○ 2023: 155 CPI
○ Today’s GDP = $23T
○ Real GDP = (nominal GDP/CPI of today)*CPI of base year (100)
○ Real GDP of 2023 = ($23T/155)*100
● 3 ways to measure:
1. Sum of spending by the following sectors:
● GDP = C + I + G + X - M
● C: households spending
● I: firms
● G: government
● X: export
● M: import (produced in other countries so subtract it for GDP)
2. Sum of value added by producers:
● Value added = value of final goods - value of intermediary goods
3. Sum of income:
● Labor income: over 70% of income
● Capital income: over 20% of income
● Indirect taxes: 10%
2) GNP
● Nominal GDP = current dollar GDP = dollar GDP
● Real GDP = GDP in terms of goods = GDP in constant dollar = GDP adjusted for
inflation
● Distinction between GNP & GDP:
○ GNP is the market value of all measurable final goods & services produced by
citizens (national) outside of their own country
■ GDP = GNP - NFP
● NFP: net factor payments = income paid to domestic factors by
foreigners - income paid to foreigners by domestic economy
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller lingtp6. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
52928 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now