[pat]

Thank you Professor Herbener

When I consider that the capital investment/expenditures are counted in the GDP, the difference between GO and GDP is going to be the cost of producer goods used in his processes and the value of his products. Obviously the GO is going to be a much bigger number. I don’t see what the excitement is about.

I guess there would be fluctuations because of a buildup or paucity of inventories in the capital goods producers. Which I guess could be used for forecasting.

[pat]

Then the GO would include machinery bought by a capital goods producer?

But the GDP would not include machinery bought by the capital goods producer?

From Investopedia

“GDP = C + G + I + NX

where

C is equal to all private consumption, or consumer spending, in a nation’s economy, G is the sum of government spending, I is the sum of all the country’s investment, including businesses capital expenditures and NX is the nation’s total net exports, calculated as total exports minus total imports (NX = Exports – Imports).”

Can you explain what capital expenditures are? And whether they are GDP or GO?

[pat]

Ok Thanks Professor Herbener, I started reading the book tonight.

[pat]

Thank you Professor Herbener, for the very complete answer.

[pat]

In the first and second paragraph you are referring to the Cantillon Effect?

[pat]

Thank you for the answer professor Herbener

In the case of the federal government. What if we assume the debt is never going to be paid back. Since the dollar is the reserve currency of the world, wouldn’t the effects of fed printing being mitigated through out the whole world, so there would not be any appreciable inflation in the United States?

So in this case does the effect of overpaid workers not have an effect on the taxpayers standard of living?

[pat]

Thanks for the detailed answer.

[pat]

Ok cool, thankyou Professor Herbener

[pat]

Ok never mind I get it now, that lesson was trickey.

[pat]

Ok never mind I get it now, that lesson was trickey.

[Author]

Posts