TAILIEUCHUNG - Lecture Essentials of Economics: Chapter 2 - Bradley R. Schiller, Cynthia Hill

Chapter 2 "The . economy", after reading this chapter, you should be able to: Explain how an economy’s size is measured, describe the absolute and relative size of the . economy, explain why the . economy can produce so much, recount how the mix of . output has changed over time, describe how (un)equally incomes are distributed. | Chapter 2 The . Economy Gross Domestic Product (GDP) Gross Domestic Product is the total value of final goods and services produced in a country during a given period of time. It is a summary measure of a nation’s output measured by the Bureau of Economic Analysis of the Commerce Department. 2- GDP is given a brief once over here. It will be revisited in the macro part of the text. Nominal GDP Nominal GDP is the value of GDP measured in current dollars. Because of inflation, it is useless to compare nominal GDP from one year to another. 2- Because inflation distorts the value of a dollar, the effects of inflation must be taken out of GDP numbers in order to have a meaningful period-to-period comparison of output. Real GDP Real GDP is the inflation-adjusted value of GDP or the value of output measured in constant prices. These inflation adjustments delete the effects of rising prices by valuing output in constant prices. 2- Real GDP allows one to compare GDP from different years more accurately. Per Capita GDP Per capita GDP is total GDP divided by total population: average GDP. It is an indicator of how much output each person would get if all output were divided evenly among the population. In 2012, per capita GDP in the . was approximately $49,000 – more than five times the world average. 2- Per capita simply means per person, in other words, an average output. Per capita GDP is a measure of the material standard of living. The Mix of Output The major uses of total output include: Household consumption Business investment Government services Exports 2- Consumption is spending by households. Investment is spending by businesses on capital goods, such as machinery, plant, and equipment. Government services include all spending by government except for income transfers. Exports represent goods sold abroad to other countries. Figure 2- C = Consumer Goods As the world’s leading “consumer” economy, consumer

• Kinh tế học
• Essentials of Economics
• Lecture Essentials of Economics
• Gross domestic product
• Investment goods
• Government services
• International economics
• Product markets
• Economic perspective
• Marginal analysis
• Inverse relationships
• Independent variables
• Market system
• Circular flow
• Market equilibrium
• Law of demand
• Exchange rates
• Preset prices
• Price elasticity of demand
• Elasticity of demand
• Market failures
• Public goods
• Business population
• Corporation advantages
• Pure competition
• Market models
• Pure monopoly
• Monopoly demand
• Monopolistic competition
• Game theory overview
• Economic growth
• Business cycles
• Economic cost of unemployment
• Aggregate demand
• Aggregate supply
• Fiscal policy
• Evaluating fiscal policy
• Financial institutions
• Federal Reserve
• Interest rates
• Monetary policy
• International trade
• Wage determination
• Labor demand
• Income inequality
• Poverty trends
• Opportunity cost
• Rational action
• Factors of production
• Optimal Mix
• Product market
• Locating markets
• Individual demand
• Market supply
• Consumer demand
• Sociopsychiatric explanation
• Total utility
• Marginal utility
• Supply decisions
• Marginal physical product
• Total profit