1. Professor Lowenberg Office: JH 4238 Phone: 818-677-4516 anton
Professor Lowenberg Office: JH Phone:

2. What is macroeconomics about?
1. Aggregate economic performance
Standard of living: How much wealth do we produce?
Real GDP (measures output and income) Employment Growth of per capita real GDP

3. 3. Interest rates and exchange rates
2. Price level
Cost of living
Price indexes, e.g., CPI
Inflation, deflation
3. Interest rates and exchange rates

4. Chapter 2 What do we produce?
1. Consumption goods
Expenditures by a household
2. Capital goods
Durable goods that increase firms’ future output
Expenditure on these goods is “investment”

5. 3. Government goods and services Purchases by all levels of government
4. Exports Expenditures by foreigners on domestic goods

6. How do we produce?
Output is produced by employing productive resources called factors of production.
The suppliers of the factors of production are paid factor income.
There are four factors of production and corresponding to each is a factor payment:

7. Labor … Wages
Capital … Interest
Land … Rent
Entrepreneurship … Profit

8. The circular flow model of the macroeconomy