Lecture 2 - Lecture2 MACROECONOMI C VARIABLES Required...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Lecture 2  MACROECONOMI C VARIABLES Required reading: Blanchard chapter 2
Background image of page 1

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

View Full DocumentRight Arrow Icon
    Macroeconomic Variables The major macroeconomic variables are: 1) Output 2) Inflation 3) Unemployment
Background image of page 2
1) Measurement of Output Great depression there were no measure of aggregate economic activity. At the end of World War II National Income and Product Accounts put together. GROSS DOMESTIC PRODUCT (GDP): measure of aggregate economic activity
Background image of page 3

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

View Full DocumentRight Arrow Icon
Definitions and Derivation of GDP (Production Side) GDP1: value of all final goods and services produced in an economy during a given period (monthly, quarterly or monthly) GDP2: sum of value added in an economy during a period. Value added by a firm: Sales- Payments for the intermediate goods (Value of production for firm- value of intermediate goods)
Background image of page 4
Definitions and Derivation of GDP (Income Side) GDP3: sum of incomes in an economy during a period
Background image of page 5

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

View Full DocumentRight Arrow Icon
Example:   Based on the example in Blanchard. 2 Firms producing milk & pudding   Firm A: Milk Production in 2010 Revenue from Sales     120,000 TL Expenses                        75,000TL               Wages              75,000 TL Profit                               45,000TL 
Background image of page 6
Example Firm B: Smoothie Production in 2007     Revenue from Sales                200,000TL     Expenses                                  155,000 TL             Wages                              35,000 TL             Milk Purchases                120,000 TL
Background image of page 7

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

View Full DocumentRight Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 30

Lecture 2 - Lecture2 MACROECONOMI C VARIABLES Required...

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online