ECON 102 1st Edition Lecture 13 Outline of Last Lecture 1 Macroeconomics Theory Policy and History a Policies b Business Cycles Outline of Current Lecture I The Expanded Circular Flow Diagram II The National Accounts Current Lecture Expanded Circular Flow Diagram National Income and Product Accounts Households earn income via the factor markets from wages interest on bonds dividends on stocks and rent on land o Stock Shares in the ownership of a company o Bond Borrowing in the form of an IOU that pays interest o In addition households receive government transfers from the government These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute o Disposable Income The total income households have left after paying taxes and receiving government transfers Inventories are stocks of goods and raw materials held it facilitate business operations Investment spending is spending on productive Final goods and services are goods and services sold Intermediate goods and services Gross Domestic Product GDP Measurement of the total value of all final goods and services produced in the economy during a given year o Measurement of GDP Income Approach Spending Approach GDP C I G X IM Value Added Approach Aggregate Spending The sum of consumer spending investment spending government purchases of goods and services and exports minus imports is the total spending on domestically produced final goods and services in the economy
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