What is macroeconomics?/GDP
Top 3 countries with highest GDP
US China Japan
long run
economic growth
big three
economic growth, inflation, unemployment
GDP approaches
income, expenditure, production
GDP
market value of the final goods and services produced within a country in a year
value added
value of production - intermediate goods
Simon Kuznets
1901-1985, received 1971 Nobel Memorial Prize in Economic sciences for his empirically founded interpretation of economic growth. Set the standard for economic research on national income. Analyzed trade cycles referred to as "kuznets cycles"
income approach (words)
GDP = (labor)(wage)+(capital)(interest)+(management)(profit)+(land)(rent)
expenditure approach
GDP = C+I+G+(X-M)
expenditure approach (words)
GDP = Consumption+Investment+Government spending+Exports-Imports
Production approach
GDP = sum of value added of sector
income approach
GDP = wL+iK+rT+pM
calculate GDP
PxQ = Market value. Add together market values.
stock
accumulated over a period of time. ex: wealth
short run
business cycle
flow
calculated for a particular period of time. ex: GDP
expenditure
how income is spent
Real GDP
in "a given year" dollars
Nominal GDP
in current dollars
macroeconomics
study of the economy as a whole
production
sum of added value of goods and services produced in the economy
income
sum of all returns to factors of production