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