slide_2 - The Data of Macroeconomics (Chapter 2) January...

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Unformatted text preview: The Data of Macroeconomics (Chapter 2) January 22, 2012 & Be familiar with important measures of economic performance & Key macroeconomic variables (and notations) & Real GDP ( Y ), Price Index ( P ) ! Nominal GDP ( PY ) & Consumption ( C ), Investment ( I ), Government Purchases ( G ), Net Exports ( NX ) & Capital ( K ) and Labor ( L ) & In&ation ( & ) & Unemployment rate ( u ) & An important concept: Real vs. Nominal variables Gross Domestic Product (GDP) & Bureau of Economic Analysis collects data of various measures of aggregate economic activity. & GDP is most widely used measure of economic activity (measure of total output) & De&nition: The GDP is de&ned as the market value of newly produced &nal goods and services. Three di/erent ways of measuring GDP 1. GDP by production: Add together the value of production in all di/erent industries 2. GDP by expenditure: Add together the spending on goods and services 3. GDP by income: Add together all the incomes that is generated from the production process For the economy as a whole, total production (output) = total expenditure = total income Macroeconomists often use "output" and "income" interchangeably. total production = total expenditure = total income (Example) consider a simple economy that produces apples only Three players: farm owner : produces apples, employs labor, borrows capital (machines) capital owner : lends capital, receives capital income worker : provide labor services, receives labor income Total production : The economy produced 100 apples in 2011.: The economy produced 100 apples in 2011....
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This note was uploaded on 01/24/2012 for the course ECON 321 taught by Professor Sani during the Spring '08 term at Rutgers.

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slide_2 - The Data of Macroeconomics (Chapter 2) January...

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