Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Oligopolists maximize their total profits by forming a cartel and acting like a
monopolist.
The prisoners dilemma shows that self-interest can prevent people from
maintaining cooperation, even when cooperation is in their mutual selfinterest.
Lecture 13
Lecture Outline
. . . Of All Final . . .
It records only the value of final goods, not intermediate goods (the value
is counted only once).
. . . Produced . . .
It includes goods and services currently produced, not transactions
involving goods produced in the past.
. . . Within a Country . . .
It measures the value of production within the geographic confines of a
country.
Price of
good A
Quantit
y of
good A
Price of
good B
Quantit
y of
good B
2001
$1
100
$2
2002
150
100
2003
200
150
50
2002
2003
N o m in a l G D P
G D P d e fla to r =
100
R eal G D P
Converting Nominal GDP to Real GDP
Nominal GDP is converted to real GDP as follows:
R e a l G D P20X X
N o m in a l G D P 20X X
100
G D P d e f la to r2 0 X X
Measuring Income
National Income
It can be calculated as
NI = W + R + i + PR
Where
Labor Income (W)
Rental Income (R)
Interest Income (i)
Profits (PR)
Measuring Income
Net domestic product
NDP equals the total final output produced within a nation during a year,
where output includes net investments or gross investments less depreciation.
NDP= GDP - depreciation
Net national product
Net National Product at market prices is the net value of final goods and
services evaluated at market prices in the course of one country.
Net National Product at factor cost is the net output evaluated at factor price.
It includes income earned by factors of production.
It can be calculated as
NNP= GNP-Depreciation
Measuring Income
PI and DI
Personal income is the total income received by the individuals of a country
from all source prior to direct taxes in one year.
Summary
It is the total market value of all final goods and services produced within a
country in a given period of time.
Nominal GDP values the production of goods and services at current prices.
Real GDP values the production of goods and services at constant prices.