Econ- Chap 5 - Development of Macro x Adam Smith: Wealth of...

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Development of Macro Adam Smith: Wealth of Nations -1776 Great Depression: 1929-1937 John Maynard Keynes (CANES) General Theory of Employment Interest and Money - 1936 Key macro variables are aggregate output--Gross Domestic Product (GDP), unemployment and inflation.
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Macro Issues and Variables Unemployment Fluctuations (Cycles) in GDP (Output) Inflation G Budget Deficits Balance of Payments –International u=U/LF Pdot= %∆P inflation rate GDP = ∑Pi*Qi----$ value of all G&S
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Link to PPF GDP = Pcomp*#comp + Pcars*#cars
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MACROECONOMICS Macroeconomics : The study of the economy in the aggregate.---ADDED UP We begin our study of macroeconomics with the country’s total income and expenditure. GROSS DOMESTIC PRODUCT
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Measuring a Nation’s Income Measuring a Nation’s Income What is Gross Domestic Product (GDP)? How is GDP related to a nation’s total income and spending? What are the components of GDP? How is GDP corrected for inflation? Does GDP measure society’s well-being?
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Income and Expenditure Gross Domestic Product (GDP) measures two things at once: total income of everyone in the economy. total expenditure on the economy’s output of For the economy as a whole, income equals expenditure income equals expenditure , because every dollar of expenditure by a buyer is a dollar of income for the seller.
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Gross Domestic Product (GDP) Is… the market value of all final goods & services produced within a country in a given period of time. Goods are valued at their market prices, so
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Econ- Chap 5 - Development of Macro x Adam Smith: Wealth of...

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