Macroecon – Flashcards
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Macroeconomics is the study of
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economy-wide phenomena.
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The basic tools of supply and demand are
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central to macroeconomic analysis as well as to microeconomic analysis.
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gross domestic product
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best single measure of a societies economic well-being
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In order to include many different goods and services in an aggregate measure, GDP is computed using, primarily,
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market prices.
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Most goods and services produced at home
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and most goods and services produced illegally are excluded from GDP.
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Gasoline is considered a final good if it is sold by a
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gasoline station to a motorist in Los Angeles.
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GDP is equal to
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the market value of all final goods and services produced within a country in a given period of time.
Y = C + I + G + NX.
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For the purpose of calculating GDP, investment is spending on
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capital equipment, inventories, and structures, including household purchases of new housing.
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Changes in nominal GDP reflect
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both changes in prices and changes in the amounts being produced.
