1.1 - Summary.
1.2 - Content.
1.2.1 - The relationship between GDP and aggregate expenditure.
Gross Domestic Product (GDP) refers to the monetary value of all finished goods and services made within a country during a specific period.
There are two approaches to measuring GDP:
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Expenditure approach - The expenditure approach attempts to calculate GDP by evaluating the sum of all final good and services purchased in an economy.
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Income approach - The income approach looks at the final income in the country.
In a macroeconomic equilibrium, output = spending = income where all income are spent on all goods and services produced. - There is no tendency for change in equilibrium, a state of stability. - The free market is more instable, but will reach towards equilibrium through the automatic adjustments of demand and supply.
1.2.1 - Background on the Keynesian AE model.
1.3 - Questions / Thought Process.
1.4 - Resources.
Approaches to GDP:
- https://www.coursesidekick.com/economics/study-guides/boundless-economics/measuring-output-using-gdp
Macroecomic equilibrium: