Week of September 21 - 25
Week of September 21 - 25 EC 2113
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This 2 page Class Notes was uploaded by Grey Garris on Monday September 28, 2015. The Class Notes belongs to EC 2113 at Mississippi State University taught by Heriberto Gonzalez Lozano in Summer 2015. Since its upload, it has received 41 views. For similar materials see Principals of Macroeconomics in Economcs at Mississippi State University.
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Date Created: 09/28/15
Ch 7 The Basics of Macroeconomics o Macroeconomics the part of economics concerned with largescale or general economic factors such as interest rates and national productivity 0 Main Factors The main three factors of Macroeconomic study are GDP GrossDomestic Product Inflation and Unemployment I GDP 0 The GDP is a measure of total expenditure in an economy Essentially it is how much money people have spent on every product that an economy produces The GDP at its most basic is a multiplication problem the amount of final goods sold multiplied by their price Their price is referred to as market value GDP is measured regularly be it yearly or quarterly 3months as it projects economic growth and decline in a nation 0 Final Goods The goods which are intended for the last user Example A tire sold to a car manufacturer is a component of those cars as such it is not a final good instead it is called an intermediate good A tire used to replace a busted one is a final good because the car owner is the one actually using it 0 Restrictions I Things without market value such as doing your own housekeeping are excluded from measurement I Illegal commodities are also excluded 0 Determining the Final Price of a Final Good 7 inganf minin Ffr lOJl Price 7 The FSnai Seth na Price 043 a good is aewamw nea he Same 19 5 Sum mus ngigr39 7 Prior or Send 39EIem FPOPH 1 5mm Sam Mew 120 1213 saggy were i 7 7 Noel Mum 5 36 3 60 Sold woo hi mmumr N 3 mo 5 40 5016 H l A 7 7 I 7 CloMam Mmm39 95 1751 50 Suki can 6 7 7 7 7 7 7 r Pr nml tibiaDEF 50 SantanaP sens M C r Venues H4O 380 The hammer m 43mm seller 04 my nal Seed Sold m coo scor 36121 0 gain at PmO o 8 Tms Price is signi cantw less icm we sum Vannie at 115 mmrscu 5 Ratings bmse Mm is no meow or m setters 0 commmd Prices who m7 3w5 need on PmI I39H The Sm or arm was is m lawlessrim Hem The New Circular Flow of the GDP No CummL F31 ow N X NT y 865 GIG ne World 7 Sw nas pm n anmmml M iquot i ur imerrrsj made b Tr Soiiers Govemm 39l39 Pumnusesi aquot 30065 ConsmPHo mmlms made bv Goods Wiser 4hr mrs New Expw X vM 39 exPo s minus EMF9M3 Nen TMSJPcn m m 490m 0 11 x65 Income 0 When looking at the GDP there is a new Circular Flow model that must be discussed This model adds the Government the Financial Market and all other Economies 0 Using this model there is a way to calculate the GDP of an economy using this equation GDP C I G NX Wherein I C the total spending by households on goods and services For renters this includes rent payments for homeowners this includes rent payments paid to the homeowner but not the purchase price or the mortgage I Machinery Structures Inventories The total spending on goods that make other goods I G Government Purchases and Sales excluding transfer payments such as Social Security I NX Exports