Title:           Macro 6 notes
Author:          Chrfrhr
Pastebin link:   http://pastebin.com/PvqvyiKV
First Edit:      Thursday 2nd of June 2016 11:08:45 AM CDT
Last Edit:       Thursday 2nd of June 2016 11:08:45 AM CDT

Economic Goals
Real GDP > 3%
 
GDP Defined
Gross domestic product or GDP is the market value of all the final goods and services produced within the boundary of a country in a given time period.
 
Current Prices (Norminal VS Real)
Year   Q  P  GDP
2012  10x$1=$10
2013  10x$2=$20
Real GDP= Nominal GDP- Inflation(price Increases)
 
Final Goods vs. Intermediate Goods
All intermediate values are included in the final good.
 
Why measure GDP?
Economic Growth
Creation of jobs
Standard of living
Increase/decrease in income
Increase/decrease in production
 
Expenditure Approach
Total expenditure is the total amount received by producers of final goods and services
C= Consumption; I= Investment
G= Government
NX=Net Export=export-import
Total expenditure=C+I+G+NX
Income approach
Labor earns wages, capital earns interests
Land earns rent, Entrepreneurs earn profits
 
Circular FLows in the US Economy
Consumption expenditures by household
$11,430 billion; 68.6%
The expenditures by households on consumption goods and services
Durable Goods
Non-durable goods