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Naked Economics Chapter 7 Summary

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Chapter seven focuses on measuring domestic output and national income. It informs on how GDP is measured, on how to figure out Real GDP and nominal GDP. It also discusses what is considered GDP, and what is not.
GDP stand for gross domestic output, which its exact definition according to the textbook, is an output as the dollar value of all final goods produced within the borders of a country, usually in a year. This is a monetary measure. There is as well Real GDP and Nominal GDP. Nominal GDP is based on prices and has not been adjusted. Real GDP is the price level adjusted. Figuring out the real GDP can be by dividing nominal over the price index.
As we take account for the things produced, also keep in mind some things cannot be included in GDP. First GDP excludes non production transaction and another thing that is not accounted for are shortcoming of GDP.
Non production item include paper for paper, or as the text states, financial transactions. Also excluded are secondhand sales. The paper for paper money …show more content…

GDP affects our society in all aspects. GDP can gear people looking for jobs into the right direction. Also people can use GDP to see if it has been declining or increasing. If GDP went down usually companies suffer profit loss or vice versa. I believe people can determine if it is good to make business. GDP also can affect people who invest their money. For example the can decide what companies their money can go into, or if people are investing in different countries decide what country has the healthiest economy so they can relocate their money there. GDP affects our society because based on result policy makers decide what needs to get done to bring back the economy to health, perhaps inflation occurred or there was a recession. These numbers affect

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