Pertemuan ke-1

• Macroeconomic Goals  how we keep this flow strong, and how we

know when it is weak.
THE ACCOUNTS
• The National Economic Accounts (NEA) make up a comprehensive
group of statistics that measure various aspects of the economy’s
performance.
• personal income, corporate profits
GROSS DOMESTIC PRODUCT
• The premier statistic for measuring the overall performance of the
economy
• dollar value of production within the nation’s borders
• the more that is produced, the healthier the economy.
THE EXPENDITURES APPROACH
• Consumption Expenditures  all the goods and services sold to
households
• Government Expenditures  The things that are produced and sold
to governments are summed together
• Investment Expenditures  business expenditures on plant and
equipment plus residential construction plus the change in business
inventories
• Exports and Imports  net exports (exports − imports)
THE INCOME APPROACH
• add up all the income that was earned in the economy
ADJUSTING FOR PRICE CHANGES
THE UNDERGROUND ECONOMY
• Anything households do for themselves and that does not pass
through a market goes unmeas ured
• Illegal gambling services, prostitution, and drugs are not counted in
official GDP estimates. The housepainter who insists on being paid in
cash to avoid taxes is part of the underground economy.
OTHER THINGS NOT COUNTED IN GDP
• secondhand sales
• Transactions that are purely financial
• Intermediate sales
OTHER MEASURES IN THE NATIONAL
ECONOMIC ACCOUNTS
Inflation
• How Inflation Is Measured  the rate at which prices are rising
• Consumer price index (CPI)  average change over time in the prices
paid by urban consumers for a market basket of consumer goods and
services.
• Consider a simple example where the typical household in the
economy consumes 5 packages of cheese and 8 boxes of crackers in a
month. If the price of cheese rises to $2.25 from $2.00 and the price
of crackers climbs to $1.50 from $1.25, then the CPI rises to 116.25
from 100.
Difficulties with the CPI
• Consumers substitute
• Goods evolve
• Quality differences
GDP Deflator = (GDP/Real GDP) × 100
The Costs of Inflation
• Inflation erodes the purchasing power of savings. Inflation
discourages savings.
• Firms have to print new brochures, restaurants need to produce new
menus, and price lists in all the media will have to be revised  menu
costs
• Lenders can be hurt by inflation because the dollars they loaned out
are repaid at a later date with dollars that are not worth as much
because of inflation. Imagine lending a friend $100 for a year at 10
percent interest. Nominal Interest Rate = Real Interest Rate +
Expected Inflation
UNEMPLOYMENT
• when real GDP is declining
• The amount of labor and other resources required for production is
reduced and people find themselves out of work.
• the number of unemployed persons divided by the labor force
• The labor force does not include retired persons, those too young to
work, and anyone who has not been actively seeking employment
five general categories of unemployed
• Discouraged workers or the hidden unemployed.
• Structural unemployment.
• seasonally unemployed as long as they actively look for work in the
off-season
• cyclically unemployed.
• frictionally unemployed