[EC140] - Final Exam Guide - Ultimate 62 pages long Study Guide!
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EC140 Full Course Notes
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Microeconomics is about the organization of markets and how markets allocate resources: focus on individual markets. Macroeconomics is the study of how the economy behaves as a whole. Change in nominal national income can be caused by either change in actual output, or change in prices. This means nominal national income is not a true indication of whether the countries productivity actually rose or not. Because of this, to compare productivity from year to year, we must use real national income: real national income: measures value of output at constant prices. Change in real national income reflects only a change in the amount of output, which allows us to compare changes in national productivity from year to year. The(cid:396)efo(cid:396)e (cid:862)(cid:396)eal(cid:863) adjusts fo(cid:396) i(cid:374)flatio(cid:374), (cid:449)hile (cid:862)(cid:374)o(cid:373)i(cid:374)al(cid:863) does (cid:374)ot. Gdp gross domestic product: one of the most commonly used measures of national income, can be measured in either real or nominal terms, periods in which real gdp falls are called recessions.
