Post on 19-Dec-2015
Agenda- 12/2
1. Turn in 8.1 Labor WS, Tucker Questions, and Guided reading WS (yellow)
2. Current Events
3. Review Taxes and GDP
4. Unit 3 Quiz
5. Stock Market Game
6. HW: Community Service Fri., 12/12
GROSS DOMESTIC PRODUCT (GDP)
The total dollar value of all final goods and services produced by resources located in the United States (regardless of who owns them) during one year’s time.
The single most important measurement of the economy’s overall performance.
COMPUTING GDP
Conceptually, you simply multiply all the final goods & services produced in a year by their prices.
(skip a line after each of the following) Goods Services Structures
CONSUMER GOODS
Goods Products purchased for final consumption
Services Items consumed instantaneously
Structures (Investment Goods) Single Family Multifamily Commercial
THINGS THAT ARE EXCLUDED FROM GDP
Intermediate Products –pieces of an item i.e. a bottle-label-cap-juice-box, etc.
Non-market Transactions –items that are not paid for such as barter or unpaid household duties.
Secondhand Sales -items that have already been counted.
Transfer Payments – when money is simply transferred back & forth between the Govt. & individuals & businesses.
Financial Transactions – Stock market / investments
COMPOSITION OF GDP
Consumer Goods (C) - items made for final consumption
Investment Goods (I) -increase in productive (physical) capital
The Government Sector (G) -purchases by government
Foreign Sector (NX) – exports minus imports
GDP (cont.)
GDP = Personal Consumption + Investments + Government Purchases + Foreign Transactions
GDP = C + I + G + NX NX = Net Exports (Exports – Imports)
Generally a negative #
“C” (Consumers)
The Consumer Sector or households account for nearly 2/3 of the economy.
The Consumer Sector receives its income from disposal personal income (after taxes).
GDP
Which of the following are included and which are excluded in calculating this year’s GDP?
- Discuss with your partner, and be prepared to show your decisions on your whiteboard. - If YES, tell me which Sector. If NO, tell
me why.
WHITEBOARDS!!! 1 board & dry erase pen per pair!
GDP?
A monthly check received by an economics student who has been granted a government scholarship that does not need to be paid back. (PELL Grant)
THE FIVE INCOME MEASURERS (Chart p. 325 of the “flow”){ This is INCOME measure, not PRODUCTION }
Gross National Product (GNP) – dollar value produced by US citizens & corporations
Net National Product (NNP) – which is GNP less depreciation
Depreciation represents the capital equipment that has worn out or become obsolete over the year.
THE FIVE INCOME MEASURERS (cont.) National Income (NI) –income left over after
all taxes have been taken out of the corporations.
Personal Income (PI) –the total amount of the nation’s income going to consumers before individual income taxes are subtracted.