1. Economic Performance and Challenges
Macroeconomics
Economic Performance and Challenges

2. macroeconomics
The study of economic behavior and decision-making in a nation’s whole economy

3. Explain how gross domestic product (GDP) is calculated
Objectives
Explain how gross domestic product (GDP) is calculated
Interpret GDP Data
Identify factors that influence GDP
Describe other output and income

4. National Income Accounting
Economic Measures
National Income Accounting
A system used to monitor the U..S. economy

5. National Income Accounting
Economist use this system by collecting and organizing macroeconomic statistics on production, income, investment, and savings. The Department of Commerce then presents these data in the form of National Income Products and Accounts (NIPA). The government uses the NIPA data to determine economic policies

6. Gross Domestic Product

7. Gross domestic Product
The most important measure of NIPA is GDP, the dollar value of all goods and services produced in a country’s borders in a given year

8. The Expenditure Approach
Government economist calculate the GDP in two ways. In one method they use the expenditure approach, sometimes called the output expenditure approach. First, economist estimate the annual expenditure, or amounts spent, on four categories of final goods and services:
Consumer goods
Business goods and services
Government goods and services
Net exports

9. Expenditure Approach

10. Intermediate Goods
Products used in the production of final goods

11. Durable Goods and Nondurable Goods

12. Income Approach
This method calculates GDP by adding up all the incomes in the economy. The rationale for this approach is that when a firm sells a product or service, the selling price minus the dollar value of goods and services purchased from other firms represents income for all firms’s owners and employees.

13. INcome Approach

14. GDP Measured in current prices
Two measures of gdp
Nominal GDP
GDP Measured in current prices
Real GDP
GDP expressed in constant , or unchanging prices

15. Nominal vs real gdp

16. What the gdp doesn’t measure
Nonmarket Activities
The Undergrown Economy
Negative Externalities
Quality of Life

17. Other Economic Measures

18. Factors that affect the gdp
Aggregate Supply
Aggregate Demand
Aggregate Equilibrium

19. Aggregate supply
The total amount of goods and services in the economy available at all price levels

20. Aggregate demand
The amount of goods and services that will be purchased at all possibles price levels

21. Gross national product

22. Gross national product
The annual income earned by a nation’s companies and people

23. depreciation
The loss of the value of capital equipment that results from normal wer and tear

24. The End