ECO 1102 Chapter Notes - Chapter 5: Final Good, Intermediate Good, Gdp Deflator

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17 Oct 2014

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ECO 1102 Full Course Notes

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Microeconomics: is the study of how individual households and firms make decisions and how they interact with one another in markets. Macroeconomics: is the study of the economy as a whole. The goals of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously. Why is average income high in some countries while it is low in others. Gdp measures the total income of a nation. Gdp is the most closely watched economic statistic because it is thought to be the best single measure of a society"s economic well-being. Gdp measures two things at once: the total income of everyone in the economy as well as the total expenditure. The reason why these two things can be measured at once is because the total income and the total expenditure is essentially the same things. For an economy as a whole, income must equal total expenditure.

Related Questions

Which of the following statements about GDP is correct

A) Money continuously flows from households to firms and then back to households, and GDP measures this flow of money

B) GDP measures two things at once: the total income of everyone in the economy and the total expenditure on the economy’s output of goods and services.

C) While not perfect, GDP is generally regarded as the best single measure of a society’s economic well-being.

D) All of the above are correct.

emeraldmarten620

Suppose that in an economy, households like to watch a TV show called Econ320. Like all TV shows, Econ320 makes people sometimes laugh, while some other times, it makes people cry. As a result, the household can be either optimistic or pessimistic depending on the particular episode they watched the night before. When households are optimistic, their productivity is high, while when they are pessimistic, they believe the productivity is low. Suppose that there is more than one TV show available so that households can have different moods. Explain whether or not the government should intervene in some way in this economy to stabilize economic fluctuations (by controlling the shows they watch and change their moods and thus productivity.) PLEASE PROVIDE DETAILED EXPLANATION, THANKS.

pinkdolphin26

1) Review the current state of the economy including GDP, inflation, unemployment.

2) Discuss the last time the federal funds and discount rates were increased as well as the last time they were decreased. Also discuss whether the Federal Reserve is currently more concerned about inflation (is it too high), GDP/economic growth (is it too weak), and unemployment (is it too high).

3) Discuss the consequences of changes in interest rate on inflation and unemployment. Also discuss the segments of society, such as younger workers, older workers, minority groups, retirees, low-income households, high-income households, goods-producing firms, services-providing firms, etc., that are hurt most by an increase in inflation as well as those who are hurt most by an increase in unemployment.

4) Discuss the ethical implications of the Federal Reserve's actions to reduce unemployment at the risk of raising inflation. Also discuss the ethical implications of the Federal Reserve's actions to reduce inflation at the risk of raising unemployment.

ECO 1102 Chapter Notes - Chapter 5: Final Good, Intermediate Good, Gdp Deflator

ECO 1102 Full Course Notes

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