View
214
Download
1
Category
Tags:
Preview:
Citation preview
Macroeconomics - Barro Chapter 2
1
C h a p t e r 2National-Income Accounting:
Gross Domestic Product and the Price Level
Macroeconomics - Barro Chapter 2
2
Nominal GDP
• Nominal GDP measures the dollar (or euro, etc.) value of all the goods and services that an economy produces during a specified period, such as a year.– Flow variable - it measures the dollar amount
of goods produced per unit of time, such as a year.
– GDP in current dollars
Macroeconomics - Barro Chapter 2
4
Real GDP
• Calculating Real GDP– Multiply each year’s quantity of output of each
good by the price of the good in a base year.– GDP in constant dollars– Chain-weighted real GDP
Macroeconomics - Barro Chapter 2
5
Calculations
• (nominal GDP)/(implicit price level) = real GDP
or
• implicit price level = (nominal GDP)/(real GDP)
Macroeconomics - Barro Chapter 2
6
GDP as a Welfare Measure
GDP does not:
• Consider change in income distribution
• Include non-market goods.
• Assign value to leisure.
• Consider environmental damage.
Macroeconomics - Barro Chapter 2
7
GDP by Expenditure
• Personal Consumption Expenditures
• Gross Private Domestic Investment
• Government purchases of Goods and Services
• Exports and Imports
Macroeconomics - Barro Chapter 2
9
Measuring GDP by Income
• National Income – Income earned by factors of production.
Recommended