Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Question
Chapter 2, Problem 1RQ
To determine
Define
Expert Solution & Answer
Explanation of Solution
GDP refers to the sum all final goods and services produced in a country during a given period. The four basic components of GDP are consumption (C), investment (I), government purchases (G), and net export (NX). GDP can be calculated using the expenditure approach, income approach, and output approach.
Economics Concept Introduction
Gross domestic product (GDP): GDP refers to the sum all final goods and services produced in a country during a given period.
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- Last year, a small nation with abundant forests cut down 200 worth of trees. It then turned 100 worth of trees into 150 worth of lumber. It used 100 worth of that lumber to produce $250 worth of bookshelves. Assuming the country produces no other outputs, and there are no other inputs used in producing trees, lumber, and bookshelves, what is this nations GDP? In other words, what is the value of the final goods the nation produced including trees, lumber and bookshelves?arrow_forwardList some of the reasons why economists should not consider GDP an effective measure of the standard of living in a county.arrow_forward
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