NIPACLASS - 1 Measuring the Economy ¡ Key Points ¢...

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Unformatted text preview: 1 Measuring the Economy ¡ Key Points ¢ Circular Flow ¢ NIPA ¢ GDP concepts 1 ¢ Value Added ¢ Real vs. Nominal GDP ¢ Deflators ¢ Welfare Comparisons Circular flow / Antigrowth Macro (episode 20) ¡ 2 NEWS Note: annual rates Key Points ¡ Definition of nominal and real GDP and difference ¢ Flow expenditure newly produced final goods & services by factors in U.S. mkt prices PxQ ¢ Quantity index of good & swervices produced Q ¡ How to deflate nominal into real GDP ¢ Nom GDP / P/100 ¢ Nom GDP / P/100 ¡ Circular flow basic ideas ¡ GDP by expenditure, type of income, how disposed of ¢ C+I+G+NX=Y=Wage+Rent+Interest+Profit=Y=C+S+T ¡ Value Added concept 3 2 More ¡ Strengths and weakness of GDP measurement ¢ Bads, externaltities, non-market activities ¢ International comparisons ¡ Market exchange rate v ppp rates (purchasing power parity) ¡ % Changes % Δ X=(X t-X t-1 )/X t-1 =X t /X t-1 – 1 ¢ % Δ XY)=% Δ X+% Δ Y approximately ¢ % Δ (XY)=% Δ X+% Δ Y approximately ¡ Growth rates % Δ ¢ Rule of 72 72/growth (or interest rate) = # years to double ¡ Also 60, 70 etc approx 4 Course Issues ¢ Tangri Lecture – Happiness Weds 9/21 7:30 pm Trayes Hall Douglass ¢ Register iClicker wit NETID now ¢ J&J Info Session 5 ¢ J&J Info Session ¡ Tues 9/20 &:30om CAC Student Center MP Room ¡ Careers.jnj.com and career services ¢ ODE Key Points of Circular Flow Model? ¡ Equivalence of Real and money flows ¢ Goods and Services/ Expenditures ¢ Factor services/ income ¡ Equality of Production and 6 Income ¡ Leakages and Injections ¢ Leakages:S (T, M) Injections I (G, X) ¡ Measure GDP by Type of Exp, Income, Disposition S (T,M) I (G,X) 3 What is (Nominal) GDP?...
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This note was uploaded on 10/09/2011 for the course ECON 103 taught by Professor Lin during the Spring '08 term at Rutgers.

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NIPACLASS - 1 Measuring the Economy ¡ Key Points ¢...

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