macroeconomics The study of economic behavior and decisionmaking in a nations whole economy Objectives Explain how gross domestic product GDP is calculated Interpret GDP Data Identify factors that influence GDP ID: 1027989
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1. MacroeconomicsEconomic Performance and Challenges
2. macroeconomicsThe study of economic behavior and decision-making in a nation’s whole economy
3. ObjectivesExplain how gross domestic product (GDP) is calculatedInterpret GDP DataIdentify factors that influence GDPDescribe other output and income
4. Economic MeasuresNational Income AccountingA system used to monitor the U..S. economy
5. National Income AccountingEconomist use this system by collecting and organizing macroeconomic statistics on production, income, investment, and savings. The Department of Commerce then presents these data in the form of National Income Products and Accounts (NIPA). The government uses the NIPA data to determine economic policies
6. Gross Domestic Product
7. Gross domestic ProductThe most important measure of NIPA is GDP, the dollar value of all goods and services produced in a country’s borders in a given year
8. The Expenditure ApproachGovernment economist calculate the GDP in two ways. In one method they use the expenditure approach, sometimes called the output expenditure approach. First, economist estimate the annual expenditure, or amounts spent, on four categories of final goods and services:Consumer goodsBusiness goods and servicesGovernment goods and servicesNet exports
9. Expenditure Approach
10. Intermediate GoodsProducts used in the production of final goods
11. Durable Goods and Nondurable Goods Durable Goods Nondurable Goods
12. Income ApproachThis method calculates GDP by adding up all the incomes in the economy. The rationale for this approach is that when a firm sells a product or service, the selling price minus the dollar value of goods and services purchased from other firms represents income for all firms’s owners and employees.
13. INcome Approach
14. Two measures of gdpNominal GDPGDP Measured in current pricesReal GDPGDP expressed in constant , or unchanging prices
15. Nominal vs real gdp
16. What the gdp doesn’t measureNonmarket ActivitiesThe Undergrown EconomyNegative ExternalitiesQuality of Life
17. Other Economic Measures
18. Factors that affect the gdpAggregate SupplyAggregate DemandAggregate Equilibrium
19. Aggregate supplyThe total amount of goods and services in the economy available at all price levels
20. Aggregate demandThe amount of goods and services that will be purchased at all possibles price levels
21. Gross national product
22. Gross national productThe annual income earned by a nation’s companies and people
23. depreciationThe loss of the value of capital equipment that results from normal wer and tear
24. The End