Notes MEASURES OF ECONOMIC ACTIVITY

 3 Main Measures of Economic Activity  Gross Domestic Product  Labor Activities  Consumer Spending HOW IS ECONOMIC ACTIVITY MEASURED?

 Why is GDP important?  Compares total output from year to year  Gross Domestic Product (GDP) – total value of all goods and services produced in a country in 1 year.  Includes:  Consumer spending  Business spending  Government spending  Exports minus Imports  Does NOT include  Intermediate goods  Underground market activities GDP

 Most accurate measure of true growth is GDP per capita  Measures output per person  Calculated by total output (GDP) divided by total population  Increase means economy is growing  Decrease means an economy is facing difficulties COMPARING GDP

 Labor Activities  Employment  Labor Force – all people 16 and over who are working or actively seeking work  Unemployment rate – portion of people in labor force who cannot secure a job  Productivity  Consumer Spending  Personal Income  Salaries, wages, investments, and government payments  Retail Sales  Sale of major retail products  Auto, building and materials, furniture, gasoline, clothing, food OTHER MEASUREMENTS