MacroEconomics Ch23.docx

4 Pages
Unlock Document

University of California - Irvine
Mu- Chun Chen

Ch. 23: Measuring a Nation’s Income - Macroeconomics: Worldwide inflation, unemployment, economy’s growth - Microeconomics: study how households and firms make decisions and how they interact in markets. A. Economy’s income & expenditure - GDP: market value of all final goods & services produced within a county in given period of time. o Measures total income of everyone in the economy and total expenditure on output of goods & services - For econ. As whole, income must equal expenditure o Buyer is always same as seller o Circular flow diagram shows the transactions B. Measurement of Gross Domestic Product - Adds dif, products into single measure of value of econ. Activity o Market prices reflect value of goods - GDP excludes items produced/sold illegally (drugs) or produced/consume at home - Intermediate good: middle process o Paper made for hallmark card o Double counting value - GDP only includes value of final goods - If int. good added to inventory for later use, then can be counted in “final” good - GDP includes tangible and intangible services - GDP is for already produced, not used stuff (car) - GDP measure value within country - GDP measures for specific interval of time - Seasonal adjustment: produces more sometimes in year, so take out this seasonal cycle - Almost same answer= statistical discrepancy C. Components of GDP - Composition of gdp: y= C + I + G + NX (identity) 1. Consumption: spending households on goods and services with exception of purchase on new housing 2. Investment: spending on capital equipment, inventories and structures,
More Less

Related notes for ECON 20B

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.