ECON 201 Lecture Notes - Lecture 5: Gdp Deflator, Output Gap, Price Level
Document Summary
Macroeconomics: comes about from great depression: maybe a free market system can fall apart. Keynesian economics: maybe government can steer the entire economic ship. Business cycles: fluctuations of real gdp about its long term growth trend. Despite being named cycles, economic growth does not flow in a purely predictable periodic pattern. The cycle is random, the best guess of what the economy is going to do is what it just did. Gross domestic product: market value of all final goods and services produced within a country in a given period of time. Measures the economy within a quarter or a year. Current production not past- what are we doing today. Production within the countries boarders, whether you are a citizen or not: output only by citizens is gross national product: gnp. Gdp does(cid:374)"t count: sales of used goods, government transfer payments- just a transfer, just new, financial transactions (shares of stock, goods produced but not sold in a market.
