NIPACLASS - 1 Measuring the Economy Key Points Circular...

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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) In the News? 2 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 % X=(X t-X t-1 )/X t-1 =X t /X t-1 1 % XY)=% X+% Y approximately % (XY)=% X+% Y approximately Growth rates % Rule of 72 72/growth (or interest rate) = # years to double Also 60, 70 etc approx 4 Course Issues Gradebook Register iClicker Intern Fair ODE Midterm 5 Advisement Inv Game 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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NIPACLASS - 1 Measuring the Economy Key Points Circular...

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