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Day 36
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  • 1. Do NowWhat did the economists featured on Frontline say the problem was with President Bush’s fiscal policy? What events or policies did they think led to the recession?
  • 2. AGENDA1. Do Now2. Finish Frontline and Review Q’s3. Estimating GDP Notes4. Taxes- Two Column Notes
  • 3. Gross Domestic Product GPD- the market value of all final goods and services produced in the nation during a given period, usually a year GDP includes production carried out by foreign businesses in the US and excludes foreign production by US businesses. GDP is used to track a countries economy over time or compare different economies at the same time.
  • 4. National Income Accounts Organize huge quantities of data collected from a variety of sources across America. The federal government summarizes and and reports these data periodically. These accounts keep track of the value of final goods and services. Only final goods and services are included in GDP. NO DOUBLE COUNTING
  • 5. Calculating GDP- Based on theExpenditure Approach Adds up the spending on all final goods and services produced in the economy during the year. 4 categories: consumption, investment, government purchases, and net exports. Consumption- purchase of final goods and services Investment- spending on new capital goods and additions to inventories. Government Purchases- spending on goods and services by all levels of government. (excluding Social Security, Welfare, and Unemployment) Net Exports- the value of the countries exports minus the value of its imports.
  • 6. GDP Based on Income Approach Aggregates income arising from production. Aggregate income- equals the sum of all the income earned by resource suppliers in the economy during a year. Calculates value added at each stage of production (no double counting) The sum of the value added at all stages equals the market value of a final good. The sum of the value added for all final goods and services equals GDP based on income approach.

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