Economics Block 2 Chapter 24 Summary
LO 24.1 Explain why economists focus on GDP, infaton, and unemployment when assessing
the health of an entie economy
Macroeconomics studies focusses on two topics:
Long-term economic growth
Short-run fluctuations in output
Business cycle Recurring increases and decreases in the level of economic activity
over periods of years; consists of peak, recession, trough, and
expansion phases.
Recession A period of declining real GDP, accompanied by lower real income
and higher unemployment.
Macroeconomics focus their atennon in three key economic
stansncs
1. Real GDP
2. Unemployment
3. Inflation
Real GDP (Gross The total market value of all fnal goods and services produced
Domesnc Product annually within the boundaries of the United States, whether
by U.S.- or foreign-supplied resources.
Unemployment The state a person is in if he or her cannot get a job despite
being willing to work and actively seeking work
Inflanon An increase in the overall level of prices
nominal GDP measured in terms of the price level at the time of
measurement; GDP not adjusted for inflation
GDP Computanons [3 approaches ]
1. Expenditure approach = Consumption CC investment IC government purchases
GC net export
expenditure appreach=C+ I +G(X −M )
2. Income approach = incomes production
3. value-added approach or industrial approach = value of primary secondary
tertiary industries
These industries are the agriculture, manufacturing and service
LO 24.2 Discuss why incieases in living standaids aie a histoiically iecent phenomenon
LO 24.1 Explain why economists focus on GDP, infaton, and unemployment when assessing
the health of an entie economy
Macroeconomics studies focusses on two topics:
Long-term economic growth
Short-run fluctuations in output
Business cycle Recurring increases and decreases in the level of economic activity
over periods of years; consists of peak, recession, trough, and
expansion phases.
Recession A period of declining real GDP, accompanied by lower real income
and higher unemployment.
Macroeconomics focus their atennon in three key economic
stansncs
1. Real GDP
2. Unemployment
3. Inflation
Real GDP (Gross The total market value of all fnal goods and services produced
Domesnc Product annually within the boundaries of the United States, whether
by U.S.- or foreign-supplied resources.
Unemployment The state a person is in if he or her cannot get a job despite
being willing to work and actively seeking work
Inflanon An increase in the overall level of prices
nominal GDP measured in terms of the price level at the time of
measurement; GDP not adjusted for inflation
GDP Computanons [3 approaches ]
1. Expenditure approach = Consumption CC investment IC government purchases
GC net export
expenditure appreach=C+ I +G(X −M )
2. Income approach = incomes production
3. value-added approach or industrial approach = value of primary secondary
tertiary industries
These industries are the agriculture, manufacturing and service
LO 24.2 Discuss why incieases in living standaids aie a histoiically iecent phenomenon
