Do NowWhat 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?
AGENDA1. Do Now2. Finish Frontline and Review Q’s3. Estimating GDP Notes4. Taxes- Two Column Notes
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.
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
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.
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.