Growth_review_handout

# Growth_review_handout - Review Midterm I Growth Summary of...

This preview shows pages 1–4. Sign up to view the full content.

Review: Midterm I UIUC Econ303 Zhao 1 Growth Summary of important slides Measure the aggregate economic activity Gross Domestic Product (GDP) is the market value of an economy's domestically produced goods and services over a specified period of time. – By production: GDP= sum of value added in all production units – By expenditure: GDP = consumption + investment + government spending + net export –B y i n c om e GDP= wage + interests, rents, and profits + depreciation + indirect taxes • Inflation measured by GDP deflator

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

View Full Document
Review: Midterm I UIUC Econ303 Zhao 2 Measure the aggregate economic activity The Unemployed are those who currently do not have a job but are actively searching for one in the last four weeks. Labor force is the sum of the employed and the unemployed. • Unemployment rate = Number of the unemployed / Labor force * 100 % • Labor force participation rate = Labor Force / Adult population * 100 % GDP and GDP Growth across Nations • Average annual growth rate over a period of time – GDP per capita year n = (1+x) n * GDP per capita year 1 – x = (GDP per capita year n / GDP per capita year 1) 1/n -1 – Approximately x = ln(1+x) = (ln GDP per capita year n – ln GDP per capita year 1)/n • Four facts of GDP and its growth across nations – A big income disparity – Disparity has been constant overall but various in sub regions – All most all countries are growing – Big disparity in growth rate
Review: Midterm I UIUC Econ303 Zhao 3 Production function • A plan to transform input to output is represented by production function • Marginal product (MP) – is the change of output / change of one input, while keep all the other input at a fixed level. – MP is the slope of the production function.

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.

{[ snackBarMessage ]}

### Page1 / 12

Growth_review_handout - Review Midterm I Growth Summary of...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online