ECON 105 Lecture 2: Chapter 19
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22 Apr 2015
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Reading: chapter 19 macroeconomics/ragan & lipsey - 14th edition. Objective: the meaning and importance of the key macroeconomic variables: most macroeconomic issues are about either long-run trends or short-run fluctuations, and that government policy is relevant for both, key macroeconomic variables. One of the most important ideas in economics is that the production of output generates ______________________. Ex: suppose an economy produces three goods only. Below is total production of goods and its prices for two years. __________________ prices in each year. (______________________ national income). income: the total income. Real national income: the total income calculated with constant prices (called base year price) in each year. (constant dollar national income). Q: determine real national incomes in 2009 and 2010, using base year 2009, and real income growth rate from 09 to 10. One of the common measure of national income is called gross domestic. Product, measured in either _____________ or __________________ terms.