Macroeconomics
1. Economic Indicators
A. Gross Domestic Product (GDP)
● Definition: Total market value of all final goods and services produced in a country
within a specific time period.
● Formulas:
○ Expenditure Approach: GDP=C+I+G+(X−M)GDP = C + I + G + (X -
M)GDP=C+I+G+(X−M)
○ Income Approach: GDP=W+R+I+P+TaxesGDP = W + R + I + P +
TaxesGDP=W+R+I+P+Taxes
B. Unemployment
● Types:
1. Frictional (short-term, voluntary).
2. Structural (mismatch of skills).
3. Cyclical (recession-driven).
C. Inflation
● Measurement:
○ Consumer Price Index (CPI).
○ Producer Price Index (PPI).
● Effects:
○ Erodes purchasing power.
○ Helps debtors, hurts savers.
● Causes:
○ Demand-pull (high demand).
○ Cost-push (rising input costs).
1. Economic Indicators
A. Gross Domestic Product (GDP)
● Definition: Total market value of all final goods and services produced in a country
within a specific time period.
● Formulas:
○ Expenditure Approach: GDP=C+I+G+(X−M)GDP = C + I + G + (X -
M)GDP=C+I+G+(X−M)
○ Income Approach: GDP=W+R+I+P+TaxesGDP = W + R + I + P +
TaxesGDP=W+R+I+P+Taxes
B. Unemployment
● Types:
1. Frictional (short-term, voluntary).
2. Structural (mismatch of skills).
3. Cyclical (recession-driven).
C. Inflation
● Measurement:
○ Consumer Price Index (CPI).
○ Producer Price Index (PPI).
● Effects:
○ Erodes purchasing power.
○ Helps debtors, hurts savers.
● Causes:
○ Demand-pull (high demand).
○ Cost-push (rising input costs).
