, A lecture 1 Wee
sync
Intro To Macro
Inflation
Output Measure Economics Performance Ov
Unemployment
GDP -_
Aggregate Output
Intermediate Good : A finis red
good which is used in th
1) GDP is the value of final
goods and services produced
during a
given period
↳ Note : Intermediate goods are not
individ
are a part of the finished
goods
↳ Double count
2) GDP is the sum of value added in the
economy during
↳ The value added by a firm is the value of its productio
used in production
goods
Important Definition
3) GDP is the sum of incomes in the
economy during a
,In where the Real GDP and Nominal GDP intersect , i
a
graph ,
Yt = Real GDP in
year
t
$ Yt = Nominal GD
Real GDP Growth Rate =Yt-Yt in
year
Yt -1
Difficulties In Calculating GDP
1) The
quality of the product is
changing over tim
→ The
approach used to adjust for improvements is to
values computers with different characteristics in a given
I
Hedonic
#
Basically Din input
in relation with
Pricing
affect on output ↳ Treats goods as
( in terms of Quality) Az
(
of characteristics
price
2) New products make things complicated
↳ Because new services are
given for free
→ For example : The price for social media services
↳ E. g. Skype makes long -
distance calls free where as
priced
↳ Implies a reduction in measured GDP
④ Measuring illegal production and
accounting for
, Unemployment Rate
Employment : Number of people who have a
job
Unemployment : Number of people
(
who are
willing and able t
a
job Have been
looking for 4 weeks]
Labour Force :
Unemployed +
Employed
L = U + N
Unemployment Rate : The ratio
number of
no :
people
of people
in the
who are
labour
U=U- unemployment
L labour force
Rich household
countries rely on
surveys to compu
↳ E. g. CPS
surveys 60,000 households
every month
Workers
Discouraged : Those who
give up looking fo
considered unemployed
Participation Rate : Ratio of labour force to total po
↳ Decreases when
Unemployment rates Increase
Relevancy
Direct
effect on welfare of the
unemployed especi -
sync
Intro To Macro
Inflation
Output Measure Economics Performance Ov
Unemployment
GDP -_
Aggregate Output
Intermediate Good : A finis red
good which is used in th
1) GDP is the value of final
goods and services produced
during a
given period
↳ Note : Intermediate goods are not
individ
are a part of the finished
goods
↳ Double count
2) GDP is the sum of value added in the
economy during
↳ The value added by a firm is the value of its productio
used in production
goods
Important Definition
3) GDP is the sum of incomes in the
economy during a
,In where the Real GDP and Nominal GDP intersect , i
a
graph ,
Yt = Real GDP in
year
t
$ Yt = Nominal GD
Real GDP Growth Rate =Yt-Yt in
year
Yt -1
Difficulties In Calculating GDP
1) The
quality of the product is
changing over tim
→ The
approach used to adjust for improvements is to
values computers with different characteristics in a given
I
Hedonic
#
Basically Din input
in relation with
Pricing
affect on output ↳ Treats goods as
( in terms of Quality) Az
(
of characteristics
price
2) New products make things complicated
↳ Because new services are
given for free
→ For example : The price for social media services
↳ E. g. Skype makes long -
distance calls free where as
priced
↳ Implies a reduction in measured GDP
④ Measuring illegal production and
accounting for
, Unemployment Rate
Employment : Number of people who have a
job
Unemployment : Number of people
(
who are
willing and able t
a
job Have been
looking for 4 weeks]
Labour Force :
Unemployed +
Employed
L = U + N
Unemployment Rate : The ratio
number of
no :
people
of people
in the
who are
labour
U=U- unemployment
L labour force
Rich household
countries rely on
surveys to compu
↳ E. g. CPS
surveys 60,000 households
every month
Workers
Discouraged : Those who
give up looking fo
considered unemployed
Participation Rate : Ratio of labour force to total po
↳ Decreases when
Unemployment rates Increase
Relevancy
Direct
effect on welfare of the
unemployed especi -
