大二上期末复习江财职协cic2013宏观chapter131课件ch2110e lecture.pptx

21;Will the U.S. economy expand more rapidly in 2011 and 2012 or will it sink back into another recession? To assess the state of the economy and to make big decisions about business expansion, firms use forecasts of GDP. What exactly is GDP? How do we use GDP to tell us how rapidly our economy is expanding or whether our economy is in a recession? How do we take the effects of inflation out of GDP to reveal the growth rate of our economic well-being? And how do we compare economic well-being across countries?;Gross Domestic Product ;Market Value GDP is a market value—goods and services are valued at their market prices. To add apples and oranges, computers and popcorn, we add the market values so we have a total value of output in dollars.;Final Goods and Services GDP is the value of the final goods and services produced. A final good (or service) is an item bought by its final user during a specified time period. A final good contrasts with an intermediate good, which is an item that is produced by one firm, bought by another firm, and used as a component of a final good or service. Excluding the value of intermediate goods and services avoids counting the same value more than once. ;Produced Within a Country GDP measures production within a country—domestic production. In a Given Time Period GDP measures production during a specific time period, normally a year or a quarter of a year.;GDP and the Circular Flow of Expenditure and Income GDP measures the value of production, which also equals total expenditure on final goods and total income. The equality of income and value of production shows the link between productivity and living standards. The circular flow diagram in Figure 21.1 illustrates the equality of income and expenditure. ;The circular flow diagram shows the transactions among households, firms, governments, and the rest of the world.;Households and Firms Households sell and firms buy the services of labor, capital, and land in factor markets. F