Defining Macroeconomics
Published on Dec 03, 2015
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MORE DECKS TO EXPLORE
PRESENTATION OUTLINE
what if iphones are selling like hotcakes
but the price of lumber is plummeting? economy in good shape?
Photo by Yutaka Tsutano
pixel analogy
Photo by Photo Giddy
three major macro measures
macroeconomic measures
- Output
- Employment levels
- Price stability
why would we measure performance?
Helps governments decide on tax policies and spending priorities
Governments use this information to see the effect of their economic policies
compare our economies to others
see how important specific industries are
oil-russia, canada
union and wage earners
use this info for contract negotiation
investment decisions
gdp (gross domestic product)
most commonly used measure of country's output
Total market value of all final goods and services produced within a country in one year.
Calculated in 2 ways
expenditure approach
add total spent on all final goods/services in one year
income approach
add income earned by different factors of production, wage, rent, etc, interest, etc.
don't count things twice!
gdp = c+g+I+(x-M)
c is for consumption
what a household spends on durable, semi-durable, and non durable goods
g is for government purchases
includes all levels of govt.
i is for investment
purchase of new capital goods for use in production process
(x-M) value of exports
x=exports, m=imports
