CHAPTER8GDP: Measuring TotalProduction and IncomeChapterOutlineandLearningObjectives8.1GrossDomesticProductMeasuresTotal Production8.2Does GDP Measure WhatWeWant it to Measure?8.3Real GDPversusNominalGDP8.4OtherMeasuresof TotalProduction andTotalIncome
1 Chapter Outline and Learning Objectives 8.1 Gross Domestic Product Measures Total Production 8.2 Does GDP Measure What We Want it to Measure? 8.3 Real GDP versus Nominal GDP 8.4 Other Measures of Total Production and Total Income CHAPTER 8 CHAPTER GDP: Measuring Total Production and Income
Microeconomicsand MacroeconomicsMicroeconomics isthe study of how households and firmsmakechoices, how they interact in markets, and how the governmentattempts to influence their choices.In contrast, macroeconomics is the study of the economy as awhole, including topics such as inflation, unemployment, andeconomic growth.Whenwe want to studythe overall economy-level actions ofpeople and governments, the models and tools ofmacroeconomics become very useful.@2015PearsonEducation,Inc
© 2015 Pearson Education, Inc. 2 Microeconomics and Macroeconomics Microeconomics is the study of how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices. In contrast, macroeconomics is the study of the economy as a whole, including topics such as inflation, unemployment, and economic growth. • When we want to study the overall economy-level actions of people and governments, the models and tools of macroeconomics become very useful
SomeImportant TermsinMacroeconomicsBusiness cycle:Alternating periods of economic expansion andeconomicrecession.Expansion: The period of a business cycle during which the totalproduction and total employment are increasing.Recession: The period of a business cycle during which totalproduction and total employment are decreasing.Economic growth: The ability of an economy to produce increasingquantities of goods and services.Inflationrate:Thepercentage increaseinthepricelevelfromoneyear to the next.@2015PearsonEducation,Inc.3
© 2015 Pearson Education, Inc. 3 Some Important Terms in Macroeconomics Business cycle: Alternating periods of economic expansion and economic recession. Expansion: The period of a business cycle during which the total production and total employment are increasing. Recession: The period of a business cycle during which total production and total employment are decreasing. Economic growth: The ability of an economy to produce increasing quantities of goods and services. Inflation rate: The percentage increase in the price level from one year to the next
Goal ofThisChapterOver the coming chapters, we will explore many aspects of theeconomy, including how all of the elements on the previous sliderelate to one another.For this chapter, we have a less lofty goal: to figure out how tomeasure the total output of an economy.Being able to measure total output is incredibly important, sincemuch of macroeconomics depends on our ability to measure andpredict aggregate economic activity.@2015PearsonEducation,Inc
© 2015 Pearson Education, Inc. 4 Goal of This Chapter Over the coming chapters, we will explore many aspects of the economy, including how all of the elements on the previous slide relate to one another. For this chapter, we have a less lofty goal: to figure out how to measure the total output of an economy. Being able to measure total output is incredibly important, since much of macroeconomics depends on our ability to measure and predict aggregate economic activity
GrossDomesticProductMeasuresTotalProduction8.1LEARNINGOBJECTIVEExplainhowtotalproductionismeasured@2015PearsonEducafion,lnc
LEARNING OBJECTIVE © 2015 Pearson Education, Inc. 5 Gross Domestic Product Measures Total Production 8.1 Explain how total production is measured