Ch_2 - Lecture Note: Chapter 2 The Data of Macroeconomics...

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Lecture Note: Chapter 2 The Data of Macroeconomics Econ 202-Macroeconomic Theory 1 Department of Economics University of Waterloo Spring 2010
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Introduction While the GDP and the rest of the national income accounts may seem to be arcane 神神   concepts, they are truly among the great inventions of the twentieth century. ............ Paul A. Samuelson & William D. Norhaus
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In this chapter, you will learn… the meaning and measurement of the most important macroeconomic statistics: Gross Domestic Product (GDP) The Consumer Price Index (CPI) The unemployment rate
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In this chapter, you will learn… Policymakers and businesspersons use these statistics to monitor the economy and formulate 神神   appropriate 神神   policies. Economists use them to develop and test theories about how the economy works. Because we’ll be learning many of these theories, it’s worth spending some time now to really understand what these statistics mean, and how they are measured.
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Gross Domestic Product: Expenditure and Income The single most important measure of overall economic performance is Gross Domestic Product (GDP). The GDP is an attempt to summarize all economic activity over a period of time in terms of a single number. It is a measure of the economy’s total output, total production and total expenditure.
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Gross Domestic Product: Expenditure and Income In the 1930's, in response to the information gap revealed by the Great Depression, Nobel Laureate economist, Simon Kuznets developed a set of national income and product accounts. The National Income and Product accounts are used to calculate GDP.
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Gross Domestic Product: Expenditure and Income Nominal GDP (GDP in current dollars) measures the market value (dollar, euro, etc.) of all the goods and services that an economy produces during a specified period, such as a year. For most goods and services, market value is determined by the price at which these items are sold in the marketplace. Some goods and services are not exchanged on markets (national defence, the justice system and police).These items enter into nominal GDP at their nominal cost of production. Potential problem- assumes no change in productivity for government employees over time.
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Expenditure and Income For owner-occupied houses, the imputed rental income is estimated and included in GDP. For government owned properties, the imputed rental income equals estimated depreciation. The sales of used goods and financial assets are not included as part of GDP. No imputation is made for the value of goods and services that are sold in the underground economy. Home production is not part of GDP.
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Ch_2 - Lecture Note: Chapter 2 The Data of Macroeconomics...

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