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Unit 2: Macroeconomics. I. Macroeconomics. A. Three Economic Goals 1. Economic Growth a. GDP (Gross Domestic Product) (3-4%) i . the market value of all final goods and services produced in an economy in one year ii. final goods/services that have
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I. Macroeconomics A. Three Economic Goals 1. Economic Growth a. GDP (Gross Domestic Product) (3-4%) i. the market value of all final goods and services produced in an economy in one year ii. final goods/services that have been purchased for final use, not for resale or further manufacture
- cheeseburger, not the patty iii. Nominal GDP - output in current dollars iv. Read GDP - adjusted for inflation - better measurement for comparing output over time v. Four categories of goods/services - consumption (c) – spending by households (70% of GDP) - government (g) – spending by all levels of government
- net exports (x-m) – spending by people abroad on U.S. goods and services (exports are x) minus spending by people in the U.S. on foreign goods and services (imports are m). - investment (i) – spending by businesses on machinery, factories, tools, and construction vi. C+I+G+ (X-M) = GDP