Recitation_1_F09

# Recitation_1_F09 - 1 1.1 14.02 Recitation 1 Macro Data...

This preview shows pages 1–2. Sign up to view the full content.

1 14.02. Recitation 1. Macro Data 1.1 Review of Macro Data Want a measure of aggregate economic activity. Question: how do we aggregate the di/erent types of goods and services into a single measure? One way to go: use the current price of each good and service as a weight to build an aggregate measure (or average). This is nominal GDP . Y t ± N X i =1 p it q it Problem: prices a/ect GDP, even if quantities do not move. Y t may real GDP , which consists of summing the quantities of ±nal goods and services using constant prices (that is, the prices of some arbitrarily chosen base year): y b t ± N X i =1 p ib q it where b denotes the base year. Note that Y t = y t t (real and nominal GDP coincide at the base year) We also want a measure of prices in the economy. Question: how do we average all the di/erent prices? Two ways to go: 1. CPI (consumer price index), which is just the price in dollars of a representative consumption basket. 2.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 10/25/2009 for the course 14 14.02 taught by Professor Geurrieri during the Fall '09 term at MIT.

### Page1 / 2

Recitation_1_F09 - 1 1.1 14.02 Recitation 1 Macro Data...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online