Review For NIA, Economic Growth, U nemployment, Recessions, Inflation, & Business Cycles Maytag produces a washersells it don’t sell it don’t sell it.

Slides:

Advertisements

Similar presentations

Measuring National Output and National Income

Advertisements

Chapter 2: The Data of Macroeconomics

Macroeconomics unit What you should know by now. You should be able to : Define the following: Gross Domestic Product (GDP) & the 4 components Unemployment.

Chapter 4: Measuring GDP and Economic Growth Objectives: 1.Define GDP and use circular flow model to explain how GDP can be measured from income or expenditure.

National Income Accounting

1 National Income and Product Accounting Gross vs. Net Domestic vs. National Product vs. Income.

Maclachlan, Macroeconomics, 9/30/04 1 Principles and Policies I: Macroeconomics Chapter 7: National Income Accounting.

Measuring GDP and Economic Growth

Learning Objectives Know what GDP measures – and what it doesn’t Know the difference between real and nominal GDP Know why aggregate.

7 - 1 Measuring Domestic Output, and National Income Measuring Domestic Output, and National Income.

7 - 1 Copyright McGraw-Hill/Irwin, 2005 Assessing the Economy’s Performance Gross Domestic Product Expenditures Approach Income Approach Other National.

 Circular Flow of Income is a simplified model of the economy that shows the flow of money through the economy.

Unit Two Macroeconomic Tools. Circular Flow See the chart on the board A little more detail.

Slide 5-1 Copyright © 2000 Addison Wesley Longman, Inc. CHAPTER 5 A First Look at Macroeconomics Chapter 22 in Economics Michael Parkin ECONOMICS 5e.

Lecture 2 The Data of Macroeconomics, Macroeconomic Accounts 1 1.Measuring the Value of Economic Activity: GDP 2.Measuring the Cost of Living: The CPI.

The branch of economic theory dealing with the economy as a whole and decision making by governments.

AP EXAM REVIEW UNIT 2 MEASURE OF ECONOMIC PERFORMANCE.

Chapter 7 Chapter 7 Measuring Domestic Output, National Income & Price Level.

Measuring National Output Chapter 5. Economic goals  Economic growth  Full employment  Low inflation  An economy grows because of increases in available.

Eco 13/1 Macroeconomics: The Nation’s Economy. National Income Accounting  To determine the health of the US economy, economists calculate the national.

Chapter 13 Measuring the Economy’s Performance  Section 1National Income Accounting  Section 2Correcting Statistics for Inflation  Section 3Aggregate.

GDP to PI. GDP=C + Ig + G + Xn  C is usually 67-70% of GDP  Xn is usually a negative number  C is the key to growth.

Unit-2 Macro Cram GDP, Unemployment, Inflation. Circular Flow of a closed Economy Spending Goods and services bought Goods and services bought Revenue.

Taking the Nation’s Economic Pulse

7 McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Measuring Domestic Output and National Income.

C + Ig + G + Xn [X-M] C + Ig + G + Xn [X-M] = GDP GDP – Depreciation = [what is for sale] NDP NDP – NFFIEUS –I ndirect B usiness Taxes = NI UCST NI –U.

Econ Unit 6 GDP, GNP, International Trade, Unemployment, Inflation.

7 McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Measuring Domestic Output and National Income.

Gross Domestic Product & Growth Macroeconomics – Part 1.

UNEMPLOYMENT AND INFLATION “There is a short run trade-off between reducing inflation and reducing unemployment.” -Me, on the second day of class.

Economic Indicators. Gross Domestic Product GDP per Capita.

Eco 200 – Principles of Macroeconomics Chapter 7: National Income Accounting.

Unit-2 Macro Review GDP, Unemployment, Inflation.

National Income Accounting How Do We Measure The Size and Health of an Economy?

Gross Domestic Product and Real GDP. Gross Domestic Product What? What? Where? Where? When? When? How? GDP is a measure of the value of all final goods.

PowerPoint Presentation by Charlie Cook Copyright © 2004 South-Western. All rights reserved. Chapter 21 The Macroeconomic Environment.

Measuring Domestic Output, National Income, and the Price Level CH 7 *

Contraction TroughExpansion Peak The business cycle is a period of macroeconomic expansion followed by a period of contraction. During the expansion phase,

Measuring Domestic Output, National Income, and the Price Level 7 C H A P T E R.

Chapter 7. Economic growth is best defined as an increase in: either or.

Business Cycles, Unemployment, and Inflation 9 McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Examples of problems. Use the table below to calculating GDP. Transfer Payments$54 Interest Income$150 Depreciation$36 Wages$67 Gross Private Investment$124.

Economic growth Macroeconomics 1. Fundamental macroeconomic indicators Economic growth Unemployment Inflation 2.

Measuring Domestic Output. Gross Domestic Product All goods & services produced within a country’s borders, in a given year. [ Geography matters, not.

7 - 1 Copyright McGraw-Hill/Irwin, 2002 Importance of Macroeconomic Measurement Gross Domestic Product Expenditures Approach Income Approach Other National.

Going Big!!!!! Micro Price Quantity Costs Revenues Profits Macro GDP Unemployment Inflation Interest Rates Money Supply.

Income Approach to GDP counting. Compensation of Employees Compensation of Employees Rents Rents Interest Interest Proprietors’ Incomes Proprietors’ Incomes.

Inflation, Unemployment, and National Income: The Abridged Version

Gross Domestic Product & Growth

Gross Domestic Product & Growth

The branch of economic theory dealing with the economy as a whole and decision making by governments. Macroeconomics.

Chapter 4: Measuring GDP and Economic Growth

Unemployment, CPI, Foreign Exchange & Balance of Payments

Gross Domestic Product

GDP, Unemployment, Inflation

I. The Circular Flow Model

2 Economic Activity 2-1 Measuring Economic Activity

And Unemployment and Inflation

Measuring Domestic Output,

Review Session 2 - Chapters 6-8

Gross Domestic Product and other Indicators

Macro Review Session According to expenditure model GDP accounting, money income derived from this year’s output is equal to: 1. corporate profits 2.

2 Economic Activity 2-1 Measuring Economic Activity

Gross Domestic Product & Growth

Gross Domestic Product & Growth

Business Cycles, Unemployment, and Inflation

Other National Accounts

Presentation transcript:

Review For NIA, Economic Growth, U nemployment, Recessions, Inflation, & Business Cycles Maytag produces a washersells it don’t sell it don’t sell it until the next year 1. If Maytag produces a washer and sells it, it counts as (Consumption/investment/disinvestment). If they don’t sell it, it counts as (“C”/ investment / disinvestment ). If they don’t sell it until the next year, it counts as (“C”/invest./disinvestment). depreciation exceeds 2. If depreciation exceeds gross investment gross investment, then In is (positive/negative). 3. If Ig were $100 bil., & In was $40 bil., then in that year the country’s capital stock [national factory] (increased/decreased) by ($40/$60) billion. Depreciation$700 Ig $500 bil. -$200 In Depreciation$60 In = $40 Ig$100

Review Questions 4-8 GDP 4. GDP is all goods/services produced (by a nation’s citizens all over the world/within the U.S.). Depreciation 5. Depreciation can be determined by: ( subtracting In from Ig/ subtract In from GDP). National Income Accounting 6. National Income Accounting GDP GDP = C+Ig+G+X-M NDP NDP = GDP – depreciation NI NI = NDP – indirect business taxes and – NFFIEUS PIUuCanc PI = NI U(-undis. Corp profits),Can(-corp. inc. taxes, SeesThunderducks t See(-soc. Secur.), + Thunderducks (transfer payments) DI DI = PI – individual income taxes Nominal GDP 7. Nominal GDP Price IndexReal GDP Price Index x 100 = Real GDP hurt during a depression 8. Workers most likely to get hurt during a depression are postponablemonopoly [few sellers] power (durable/non-durable) ones because these goods are postponable & they have monopoly [few sellers] power.

Review Questions 5-12 Review Questions 5-12 Inflation 9. Inflation (chg.) [5] later year’s index(120-earlier year’s index(115) (chg.) [5] (org.) [115] x100 = 4.3 % earlier year’s index (115) (org.) [115] x100 = 4.3 % CPI falls If CPI falls from one year to the next, (inflation/deflation) results _-5_ -4.3 % 115 = 115 x 100 = -4.3 % base yearprice index 10. In the base year, the price index is always? ______ $10 trillion 100 $10 trillion x100 = 100 Income earned by U.S. resource suppliers 11. Income earned by U.S. resource suppliers [here & abroad] is (NDP/NI/PI). FE GDP 12. Another name for FE GDP is (zero unemployment/potential GDP)

Review Questions Review Questions recessionGDP 13. During a recession, (actual/potential) GDP exceeds (actual/potential) GDP, but the (actual/potential) unemployment rate unemployment rate exceeds the (actual/potential) unemployment rate. 5 million part time workers2 million 14. If there are 5 million part time workers and 2 million get full time jobs get full time jobs, the unemployment rate (increases/decreases/stays the same). 6 million unemployed3 million get discouraged 15. If there are 6 million unemployed and 3 million get discouraged and quit looking, unemployment (increases/decreases/stays the same). presence of discouraged workerscounting part-time 16. The presence of discouraged workers and counting part-time workers as fully employed workers as fully employed (understates/overstates) the official rate. unemployment rate is 10nominal GDP is $400 billion cyclicalrealunemployment% gapoutput (GDP) being forgone 17. If the unemployment rate is 10% & nominal GDP is $400 billion, then cyclical (real) unemployment is ___%, the % gap is ___%, and output (GDP) being forgone is $__________. move from a recession to FE 18. If we move from a recession to FE, we move from a (point inside the PPC to the PPC/shift the PPC out). unemployment is 15%nominal GDP is $100 bilcyclical (real) 19. If unemployment is 15% & nominal GDP is $100 bil., then cyclical (real) unemployment% gapY being forgone unemployment is ___%, the % gap is ___%, & Y being forgone is $______.Recession billion bil.